BEFORE
THE
ILLINOIS
POLLUTION
CONTROL BOARD
PEOPLE
OF
THE
STATE
OF
ILLINOIS
V.
Complainant,
TOYAL
AMERICA,
INC.
, formerly
known
as
ALCAN-TOYO
AMERICA,
INC.,
a
foreign
corporation,
Respondent.
)
)
)
)
)
)
)
)
)
)
)
PCB
2000-211
(Enforcement)
CLERIc’S
OFFICE
APR
10
2009
STATE
OF
ILLINOIS
?oIIut
IOfl
Control
Board
NOTICE
OF
FILING
TO:
Christopher Grant
Office
of
the
Attorney
General
Environmental
Bureau
69
West
Washington
Street
18
th
Floor
Chicago,
IL 60602
John
Therriault,
Assistant
Clerk
Illinois
Pollution
Control
Board
100
West
Randolph
Street
- Suite
11-500
Chicago,
IL
60601
Bradley
P.
Halloran
Hearing
Officer
Illinois
Pollution
Control
Board
James
R. Thompson
Center
- Suite
11-500
100
W.
Randolph
Street
Chicago,
IL
60601
Please
take
notice
that
on
Friday
April
10,
2009
we
filed
Respondent’s
Closing
Argument
and
Post-Hearing
Brief
and
Motion
to
File
An
Expanded
Post-Hearing
Brief
Instanter,
a copy
of
which
is herewith
served
upon
you.
Respectfully
submitted,
TOYAL
AMERICA,
INC.
Roy
M.
Harsch
Lawrence
W.
Falbe
Yesenia
Villasenor-Rodriguez
DRThXER
BIDDLE
&
REATH
LLP
191
N.
Wacker
Drive
Suite
3700
Chicago,
IL
60606-1698
Telephone:
(312)
569-1000
Facsimile:
(312)
569-3000
THIS
FILING
IS SUBMITTED
ON
RECYCLED
PAPER
By:
Kk
One
of its
attorneys
BEFORE
THE
ILLINOIS
POLLUTION
CONTROL
BOARD
PEOPLE
OF
THE
STATE
OF
ILLINOIS
)
)
Complainant,
)
)
PCB2000-211
CLERKoF,D
V.
)
(Enforcement)
)
TOYAL
AMERICA,
[NC.
foreign
as
ALCAN-TOYOcorporation,AMERICA,
,
formerly
INC.,
known
a
)
))
POllUtiOn
STATE
OF
Control
ILLINOI
Bo$d
)
Respondent.
)
RESPONDENT’S
CLOSING
ARGUMENT
AND
POST-HEARING
BRIEF
NOW
COMES
Respondent,
TOYAL
AMERICA,
INC.
(“Toyal”),
by
and
through
its
attorneys,
Drinker
Biddle
&
Reath
LLP,
and
hereby
presents
its
Closing
Argument
and
Post-
Hearing
Brief.
I.
INTRODUCTION
This
case
is
unlike
other
most
enforcement
actions,
and its
unusual
facts
clearly
do
not
support
the
assessment
of
a
substantial
penalty
against
Toyal.
Here,
there
were
unique
circumstances
which
greatly
impeded
the
ability
of
Toyal
to
demonstrate
compliance
with
35
Ill.
Adm.
Code
Part
218
(“Subpart
TT
rules”)
regarding
volatile
organic
matter
(“VOM”)
emissions
until
Toyal
had
worked
through
many
extremely
challenging
technical
and
operational
issues.
While
Toyal does
not
contest
that
it
did
not
demonstrate
compliance
with
Subpart
TT
until
April
2003,
Toyal
did
operate
a control
device
from
1998
until
the
present.
Further,
because
Toyal
did
in
fact
demonstrate
full compliance
years
ago,
the
only
issue
before the
Board
is
what
is
the
appropriate
civil
penalty
to
be
assessed
against
Toyal
for
the
non-compliance
period.
While
the
Complainant
contends
that
Toyal
‘ s
behavior
merits
a
substantial
penalty,
the
evidence
before
the
Board
shows
quite the
opposite.
THIS FILING
SUBMITTED
ON
RECYCLED
PAPER
As the
evidence
introduced
at the
December
10
th
and
11
th
hearing
in this
matter
attests,
and
as
set
forth
in detail
herein,
only
a modest
penalty,
if
any,
should
be
assessed.
Toyal
was
diligent
in trying
to
achieve
compliance
with
the
Subpart
TT
rules,
as
is evidenced
by
the
fact
that
it
hired,
relied
upon,
and
executed
the
advice
of
reputable
expert
consultants, which
efforts
did
result
in
proving
compliance
in
2003.
Toyal
consistently
kept
the
Illinois
Environmental
Protection
Agency
(“Illinois
EPA”)
apprised
of
what
it
was
doing
to
achieve
compliance
and,
significantly,
Illinois
EPA
even
granted
Toyal
several
extensions
during
the noncompliance
period
to complete
modifications
to
its
pollution
control
system
and other
compliance
efforts.
Since
finally
resolving
its
compliance
challenges
(which
were
met
by utilizing
a
“Permanent
Total
Enclosure”
(“PTE”)
strategy,
as
discussed
further
herein),
Toyal
has
consistently
been
in
compliance
with
all of
the
Subpart
TT rules
and
has
not
received
any
notice
of
violation
(“NOV”)
since
the
1998
NOV
which
precipitated
the matter
at hand.
Finally,
Toyal
has
replaced
its
original
permitted
pollution
control
device
with
a
new
and
more
efficient
one
that
has resulted
in
lower
actual
emissions.
Based
on the
above,
Toyal
believes
that
a
substantial
penalty
should
not
be imposed
in
this
matter,
as
such
unwarranted
punishment
would
be simply
punitive,
and
not
promote
‘enforcement
of
the Illinois
Environmental
Protection
Act
(the
“Act”). 415
ILCS
5/1
et
seq.
Toyal
also
does
not
believe
that
an
economic
benefit
component
to
a
penalty
should
be
assessed
because
its non-compliance
resulted
in
a negative
cost
to
Toyal,
in
that
it
lost
the opportunity
to
obtain
savings
that
would
have
inured
to
it had
earlier
compliance
been
achieved.
Such
lost
opportunity
for savings
more
than
offsets
any
theoretical
gains
from
noncompliance.
In
addition,
Toyal
contends
that
its
expenditure
for
significant
pollution
control
equipment,
specifically,
$1
million
spent
in
good
faith
for a
vacuum
chiller
unit
in
furtherance
of
its emissions
control
-2-
efforts,
should
also
be
offset
against
any
theoretical
economic
benefit
that
inured
to
Toyal
for
its
noncompliance,
notwithstanding
the
fact
that
the
particular
unit was
not
utilized
as part
of
Toyal’s
eventual
compliance
strategy.
As
set
forth
in
Complainant’s
Closing
Argument
and
Post-Hearing
Brief (“Complainant’s
Brief’),
Complainant’s
demand
for
a
significant
penalty
disregards
and
dismisses
the
fact
that
Toyal’s
operations
are
complex
and
unique.
Incredibly,
Complainant
portrays
loyal’s
several
years’
worth
of
expensive
and
time-consuming
(and
eventually
successful)
efforts
towards
achieving
compliance
as
evidence
of
loyal’s
complete
disregard
of
and contempt
for
its
obligations
under
the
Act.
This
is
completely
inaccurate
and
unfair.
Toyal
‘5
significant
efforts
towards
compliance
during
these
years
resulted
in continual
improvements
to
and
better
understanding
of
its
facility,
as
well
as
incremental
reduction
in
its
emissions,
even
as
Toyal
progressed
towards
eventually
showing
full
compliance.
Indeed,
the
facts
relevant
to
loyal’s
efforts
to
work
with
the
Illinois
EPA
show
that
even
the
agency
did
not
fully
understand
the
complexities
of
the
rules,
as
they
applied
to
Toyal.
Consequently,
loyal’s
period
of
non
compliance
was
not
due
to
its
disregard
for
the
rules
but,
rather,
because
of
the
unique
circumstances
inherent
in
its manufacturing
operations
that
complicated
its
ability
to
demonstrate
compliance.
Therefore,
Toyal
respectfully
requests
that
the
Board
consider
all
the
relevant
factors
and
the
unique
circumstances
applicable
to
loyal’s
situation
in
determining
the
appropriateness
of
a
civil
penalty,
if
any. Assessment
of
only
a
modest
penalty
in
this
unusual
case
is
appropriate
and
consistent
with
the
goals
of
the
Act,
as
explained
fully
herein.
-3-
II.
SUMMARY
OF
FACTS
A.
Toyal’s
Business,
Operations
and
Challenges
Toyal
is
in
the business
of
manufacturing
aluminum
atomized
powder
and
aluminum
paste
and
flakes.
(Tr.,
12/10/08,
p.140:20-21).
Toyal
manufactures
over
400
hundred different
products
in various
batch
processes
(Tr.,
12/11/08,
p.70:6-i
1), and
it
has
approximately
j
different
VOM
emission
sources
at
its facility.
(Tr.,
12/11/08,
p.
4:23-5:9). Toyal’s
customers
include
the
automOtive
industry,
the
rocket
industry
(where
the
powders
are
used
as rocket
propellant
fuel
for the
solid
boosters
found
on
missiles),
the
military,
and
the
refractory
brick
industry.
(Tr.,
12/10/08,
140:20-141:17).
The
paste
operations
make
up the
largest
component
of Toyal’s
business,
and
the
automotive
industry
is its
main
customer.
(Tr.,
12/10/08,
p.141:4-
17).
The
aluminum
pigments
that
are
manufactured
at
the Toyal
facility
are
used
by
automotive
industry
clients
to
provide
the
metallic
coating
on
some
cars.
(Id.).
There
are
certain
unavoidable
risks
inherently
involved
with
Toyal’s
manufacturing
operations,
including
fires
and
explosions,
despite
the
best
practices
with
which
Toyal
conducts
its
operations.’
Unfortunately,
during
the
period
from
1999
through
2001,
there
were
nine
fires
at the
Toyal
facility.
(See
Resp.
Exhibit
7,
p.
7). The
various
causes
of
the fire
were
related
to
static
discharges,
lack
of complete
aluminum
oxidation
during
the
milling
process,
mechanical
action,
moisture
contamination,
and impact
sparking.
(See
Resp.
Exhibit
7,
p.
9).
As
a result
of
these
fires,
Toyal
understandably
was
under
pressure
from
its insurance
companies
to
reduce
the
number
of
fires.
Consequently,
this
period
of
time
was
challenging
for
Toyal
because
it
was
Specifically,
Toyal’s
aluminum
atomized
powder
operations
are
highly
explosive
due to
the
dust
that
is formed
during
the
manufacturing
process.
(Tr.,
12/10/08,
p.
132).
It only
takes
a
small
amount
of energy
(between
two
and four
millijoules)
to ignite
dust
formed
during
the
manufacturing
process
and cause
an
explosion.
(Tr.,
12/10/08,
p.
133:5-10).
-4-
dealing
with
the
health
and
safety
issues
described
above,
while
at
the
same
time
it
was
striving
to
demonstrate
compliance
with
the
Subpart
TT
regulations.
(Tr.,
12/10/08,
p.152:21-2
4
).
In
fact,
Toyal
invested
close
to
$1
million
for
fire
suppression
systems
and
alarm
systems
for
the
plant.
(Tr.,
12/10/08,
p.153:3-8).
Additionally,
it
made
changes
to
its
safety
and
environmental
management
systems
while
also
training
its
employees
to
prevent
and
minimize
the
incidents
and
damage
from
any
potential
fires
and
explosions.
(Tr.,
12/10/08,
p.153:3-22).
Toyal’s
improved
safety
measures
were
largely
successful
and,
after
2001,
internal
operational
improvements
at
Toyal
reduced
the
number
of
incidents.
However,
there
was
one
fire
in
December
2003
(Resp.
Exhibit
7,
p.
7-8),
and
then
an
additional
fire
in
the
Catalytic
Recuperative
Oxidizer
(“CR0”)
in
December
2006.
(Tr.,
12/10/08,
p.
148:17-24).
The
most
recent
explosion
occurred
on
August
26,
2008.
(Tr.,
12/10/08,
p.
149:410).2
Toyal
is
a
small
plant
in
relation
to
other
similar
plants.
Consequently,
when
fires
and/or
explosions
occur
at
its
facility,
it
must
immediately
divert
all
of
its
resources
(including
management,
engineering,
technical,
production,
safety,
health
and
environmental
personnel)
to
investigate
the
accident.
(Tr.,
12/10/08,
p.
154:19-155:9).
As
a
result,
many
things
must
occur
simultaneously
as
part
of
the
accident
follow-up,
which
is
taxing
on
the
very
small
professional
staff
at
the
facility.
For
example,
insurance
companies
and
OSITA
spend
substantial
time
at
the
facility
investigating
the
incident,
which
demands
considerable
facility
resources.
(Tr.,
12/10/08,
p.
155:10-14).
In
addition,
there
is
an
appreciable
amount
of
outside
testing
which
is
conducted.
2
Toyal
immediately
shut
down
its
paste
and
flake
operations
as
required
by
its
permit
until
it
was
able
to
obtain
a
provisional
variance.
(Tr.,
12/10/08,
p.
150:17-151:3).
Toyal
obtained
the
provisional
variance
from
the
Illinois
EPA
on
December
21,
2006
and
was
compliant
with
all
the
terms
of
the
provisional
variance.
(Tr.,
12/10/08,
p.
151:5-7).
-5-
(Tr.,
12/10/08,
p.
155:20-156:3).
Consequently,
when
fire
and/or
explosions
occur,
they
are
very
time-consuming,
resource-intensive
and
expensive.
(Tr.,
12/10/08,
p.
155:10-14).
B.
Toyal’s
VOM
Pre-1998
Compliance
History
and
Efforts
Toyal
first
learned
of
the
Subpart
TT
rules
approximately
around
February
27,
1995,
which
was
about
two
weeks
prior
to
the
time
when
the
rules
were
to
take
effect.
(Tr.,
12/10/08,
p.
178:19-23).
During
this
time
period,
Toyal
was
also
completing
a
Clean
Air
Act
Title
V
permit
application
(“CAAPP”).
(Tr.,
12/10/08,
p.
179:6-12).
However,
it
was
not
until
it
completed
its
Title
V
analysis
that
Toyal
was
able
to
determine
with
certainty
that
it
was
subject
to
the
Subpart
TT
rules.
(Tr.,
12/10/08,
p.
180:11-14).
Toyal
disclosed
its
noncompliance
when
it
timely
submitted
its
CAAPP
application
(which
contained
an
action
plan
and
compliance
schedule)
in
February
1996.
(Tr.,
12/10/08,
p.
179:21-180:15).
Toyal
did
not
receive
any
feedback
from
the
Illinois
EPA
regarding
its
compliance
schedule.
(Tr.,
12/10/08,
p.
179:21-
180:15).
Montgomery
Watson,
a
nationally-recognized
consulting
firm
with
which
Toyal
had
prior
successful
experience,
assisted
Toyal
with
the
CAAPP
application.
(Tr.,
12/10/08,
p.
158:10-14).
Toyal
became
dissatisfied
with
Montgomery
Watson’s
responsiveness
as
the
compliance
work
progressed
and,
thus,
ceased
working
with
Montgomery
Watson.
(Tr.,
12/10/08,
p.
158:17-159:5).
Approximately
in
January
1997,
Toyal
selected
and
retained
Woodward-Clyde
as
its
consultant
based
on
Toyal’s
previous
experience
with
Woodward-Clyde,
and
its
reputation
in
the
industry
(Resp.
Exhibit
7,
p.
2
and
Tr.,
12/10/08,
p.
159:17-23).
Woodward-Clyde
assisted
Toyal
with:
(1)
selecting
the
proper
equipment;
and
(2)
designing
and
overseeing
the
installation
of
the
overall
system
to
bring
Toyal
into
compliance.
(Id.).
After
investigation
of
Toyal’s
systems,
Woodward-Clyde
recommended
the
installation
of
an
RCO,
capture
pick-up
points
and
-6-
ductwork
that
would
be
required
throughout
the
system
to
comply
with
the
Subpart
TT
rule.
(Tr.,
12/10/08,
p.
160:4-13).
With
the
help
of
Woodward-Clyde,
the
design
work
was
completed
and
a
construction
permit
application
submitted,
and
in
June
1998,
Toyal
received
a
construction
permit
from
Illinois
EPA
for
installation
of
an
RCO
unit,
which
was
installed
by
November
1998.
(Resp.
Exhibit
7,
p.
3).
On
December
1,
1998,
Toyal
began
operating
the
RCO
equipment.
(Id.).
Based
on
its
implementation
of
Woodward-Clyde’s
recommendations,
Toyal
expected
to
have
a
successful
RCO
stack
test
and
easily
achieve
compliance.
The
stack
test
was
scheduled
for
December
29,
1998.
(Resp.
Exhibit
5,
p.
1).
Toyal
invited
Kevin
Mattison
of
the
Illinois
EPA
to
a
pre-stack
test
visit
as
recommended
by
Toyal’s
stack
testing
company,
ARI.
(Tr.,
12/10/08,
p.
160:4-13).
However,
at
this
pre-stack
test
inspection,
Mr.
Mattison
identified
a
number
of
concerns
regarding
the
capture
and
collection
system,
the
fact
that
not
all
sources
identified
were
connected,
and
the
need
for
additional
temperature
monitoring.
(Resp.
Exhibit
7,
p.
4).
Toyal
was
taken
by
surprise
with
the
issues
identified
by
Mr.
Mattison,
as
Woodward-Clyde
had
advised
it
that
the
equipment
was
in
compliance.
(Tr.,
12/10/08,
pp.
165:20-166:1).
It
became
apparent
that
Woodward-Clyde
had
concentrated
on
the
destmction
efficiency
of
the
RCO
without
adequately
considering
how
Toyal
would
address
and
prove
the
second
aspect
of
the
test,
which
was
to
demonstrate
capture
efficiency,
because
Illinois
EPA
was
not
willing
to
accept.
Woodward-Clyde’s
assumptions
and
calculations
on
this
prong
of
the
test.
(Tr.,
12/10/08,
p.
165:7-19).
As
a
result,
Toyal
lost
confidence
in
Woodward-Clyde,
and
decided
that
it
need
to
shift
these
responsibilities
to
another
consultant
better
qualified
to
help
Toyal
achieve
compliance.
(Tr.,
12/10/08,
p.
166:2-10).
-7-
C.
Toyal’s
1999-2001
Compliance
Efforts
Subsequent
to
loyal’s
unfortunate
surprise
with
respect
to
rejection
of
its
consultant’s
recommendations
by
Illinois
EPA,
Toyal
was
required
to
rethink
how
it
was
going
to
go
about
demonstrating
compliance
with
the
Subpart
TT
rules.
(Tr.,
12/10/08,
p.
166:2-10).
Toyal
wrote
a
letter
to
Mr.
Mattison
dated
December
30,
1998,
in
which
it
cancelled
the
scheduled
December
1998
stack
test
and
requested
an
extension
until
February
28,
1999,
based
upon
the
concerns
Mr.
Mattison
identified
in
the
pre-stack
test
inspection.
(Resp.
Exhibit
5).
Subsequently,
Toyal
had
several
conversations
with
the
Illinois
EPA
in
January
and
February
1999
regarding
its
follow-up
efforts
to
address
those
issues.
4
It
should
be
noted
that,
despite
not
having
conducted
a
stack
test,
loyal
continued
to
operate
the
RCO
control
deviëe
beginning
in
December
1998
(Tr.,
12/10108
p.29:14-22),
and
thus
achieved
actual
reductions
to
its
emissions,
despite
not
being
ready
to
prove
compliance
under
the
VOM
regulations.
Dealing
with
the
fire
incidents
and
aftermath
related
to
the
safety
concerns
at
the
facility,
in
addition
to
diligently
pursuing
its
compliance
efforts,
was
a
challenge
for
Toyal.
From
1999
through
2001,
Toyal
added
a
continuous
emission
monitoring
system
(“CEM”)
unit
on
the
RCO,
as
well
as
adding
additional
hoods,
conducting
additional
testing,
investigating
alternative
methods
of
destruction
(specifically
the
issue
of
whether
it
would
need
to
change
the
RCO
to
a
recuperative
thermal
oxidizer
(“RTO”)
or
modified
RTO),
investing
in
a
centralized
vacuum
system,
and
changing
its
internal
management
organization
to
better
address
the
issues
and
safety
concerns.
(Resp.
Exhibit
7
pp.
5
and
10).
There
is
a
typo
in
the
original
document
which
indicates
February
29,
1998.
However,
the
correct
date
should
read
February
28,
1999.
There
is
a
typo
in
the
original
document
which
shows
the
dates
for
19
through
21
as
1990.
However,
the
correct
date
should
read
as
1999.
-8-
After
Toyal
ceased
to
work
with
Woodward-Clyde,
it
began
working
with
Chemstress
Engineering
(“Chemstress”)
to
address
the
unresolved
issues
identified
by
Mr.
Mattison.
(Tr.,
12/11/08,
P.
20:8-15).
Chemstress
was
on
site
performing
process
engineering
for
the
paste
B
unit
expansion
project
which
consisted
of
the
installation
of
a
new
set
of
ball
mills
to
replace
the
older
ball
mills.
Specifically,
this
project
involved
removing
the
six
old
mills,
and
replacing
them
with
four
mills
and
two
mills,
respectively,
of
two
different
sizes,
and
then
making
those
into
individual
units
along
with
screens
and
tanks.
(Tr.,
12/11/08,
p.
29:9-18).
(Tr.,
12/10/08,
p.
118:20-119:1).
With
respect
to
demonstrating
compliance
of
the
capture
system,
Chemstress
was
involved
in
the
ongoing
work
in
trying
to
identify
source
points
and
engineer
solutions
to
those.
(Id.).
Additionally,
Chemstress
recommended
the
use
of
a
vacuum
chiller
system
to
replace
the
numerous
vacuum
pumps
throughout
the
plant
(these
are
all
emission
sources
as
identified
through
the
permit
process)
with
a
centralized
vacuum
and
condenser
system
that
would
act
as
a
control
device
to
aid
in
controlling
some
of
the
fugitive
emission
points.
(Tr.,
12/10/08
p.
214:3-13).
Toyal
sought
the
necessary
internal
approvals
and
purchased
the
vacuum
chiller
unit
which
cost
Toyal
approximately
$1
million
dollars.
(Tr.,
12/10/08,
p.
166:24-167:2).
Although
Toyal
was
not
able
to
demonstrate
compliance
with
the
work
completed
by
its
early
consultants,
the
work
done
by
each
had
a
benefit,
in
that
Toyal
was
able
to
learn
a
little
more
about
the
challenges
that
existed
at
its
facility
and
what
it
would
need
to
address
in
order
to
demonstrate
compliance
with
Subpart
TT.
During
the
2000-200
1
time
frame,
Toyal
underwent
various
management
changes
at
its
plant,
including
hiring
Ray
Malmgren
as
the
engineering
manager
in
July
2000.
(Tr.,
12/11/08,
Complainant
contends
that
despite
its
non-compliance,
Toyal
continued
to
upgrade
its
production
equipment
at
its
facility.
(Resp.
Brief,
p.
19).
In
actuality,
however,
this
modification
project
resulted
in
only
a
small
amount
of
capacity
increase.
(Tr.,
12/10/08,
p.
118:20-119:1).
-9-
p.
4:12-18).
Mr.
Malmgren
hired
Steve
Anderson
of
Admiral
Consulting
to
assist
with
the
compliance
and
permitting
issues.
On
April
18,
2001,
Toyal
applied
for
a
construction
permit
that
included
several
projects
such
as
the
paste
B
unit
expansion,
installation
of
an
RTO
at
its
facility
to
replace
the
RCO,
the
vacuum
chiller
unit
that
was
recommended
by
Chemstress,
and
various
other
projects
related
to
improved
capture.
(Resp.
Exhibit
22
and
Tr.,
12/11/08,
p.
192:10-17).
Toyal
also
worked
with
ARI
consultants
to
come
up
with
a
testing
plan
to
generate
additional
data
regarding
the
emissions
from
various
emissions
points
that
had
to
be
captured.
Specifically,
ART’s
function
was
to
assist
Toyal
with
implementing
a
data
acquisition
system
to
gather
better
data
from
the
RCO
operation
and
secondly,
to
determine
what
it
would
take
to
make
the
RCO
compliant
with
the
Subpart
TT
rules
(i.e.,
be
able
to
complete
a
compliance
test
and
successfully
demonstrate
compliance).
(Tr.,
12/11/08,
p.36:12-19).
Unfortunately,
in
evaluating
the
system,
ARI
was
unable
to
put
forth
a
program
that
Toyal
felt
would
satisfy
its
compliance
obligations.
Thus,
Toyal
again
began
to
look
for
yet
another
consultant
to
assist
with
its
compliance
obligations,
and
retained
Clean
Air
Engineering.
D.
Deciding
On
Permanent
Total
Enclosure
As
the
Solution
to
Toyal’s
Compliance
Issues
During
the
200
1-2002
time
period,
Toyal
fmally
was
able
to
work
with
two
consultants,
Clean
Air
Engineering
and
Admiral
Consulting,
that
understood
what
it
would
take
for
Toyal
to
demonstrate
compliance
with
the
capture
efficiency
portion
of
the
Subpart
TT
rules.
(Tr.,
12/11/08,
p.37:9-17).
Clean
Air
Engineering
was
retained
as
the
stack
testing
consultant
and
Admiral
Consulting
was
retained
as
the
engineering
consultant.
Clean
Air
and
Admiral
Consulting
devised
a
compliance
plan
using
the
principle
of
Permanent
Total
Enclosure,
or
“PTE”.
(Tr.,
12/11/08,
p.37:19-22).
This
required
that
over
120
pieces
of
equipment
in
Toyal’s
manufacturing
process
be
enclosed
in
such
a
manner
that
qualifies
under
the
definition
of
PTE
-10-
and
connected
to
the
control
device.
(Tr.,
12/11/08,
p.38:10-17).
Additionally,
in
order to
understand
what
was
going
on in
the
RCO
device,
Toyal
installed
a
second
flame
ionization
detector
to
monitor
the
inlet
of
the
RCO
that
would
allow
it to
track
the
loading
coming
into
the
unit.
(Tr., 12/11/08,
p.41:4-15).
At
the
same
time,
it
installed
flow
monitoring
instrumentation
that
allowed
it
to
totalize
the
level
of
VOMs
going into
the
unit.
(Tr.,
12/11/08,
p.41:8-15).
As
a
result
of
the
above,
Toyal
and
its
team
of
its
consultants
determined
that
it
could
capture
all
emissions
and
continue
with
its
efforts
to
operate
the
existing
RCO
unit
without
the
need
to
install
an
RTO.
(Tr.,
12/11/08,
p.
41
:16-22).
Moreover,
it
determined
that
the
vacuum
chiller
unit,
which
had been
recommended
by
Chemstress
and
already
purchased
and
delivered,
would
not
be
necessary
to
demonstrate
compliance
with
the
Subpart
TT
rules. (Tr.,
12/11/08,
p.42:14-
43:7).
During
the
2002-2003,
Toyal
conducted
most
of
the
work
to
enable
it
to
successfully
demonstrate
compliance
with
the
Subpart
TT
rule
through
the
concept
of
PTE.
This
required
a
considerable
amount
of
time
and
effort
as
Toyal
had
to
ensure
that
enclosure,
capture
and
collection
systems
for
the
129
sources
were
configured
and
balanced
with
a specific
flow
rate
to
meet
PTE
requirement.
(Tr.,
12/11/08,
p.45:14-19).
Toyal
also
invested
much
time
in
designing
the
necessary
enclosure,
capture,
and
duct
work
of
its
tank
farm
system
with
the
rest
of
the
source
point
connections
and
vacuum
pumps.
(Tr.,
12/11/08,
p.48:1-8).
In
addition,
Toyal
had
to
connect
its
air
stripping
solvent
system
to
the
RCO
which
required
designing
connection
points
in
the
solvent
distillation
system
that
would
be
connected
to
the
RCO.
(Tr.,
12/11/08,
p.46:6-14).
Toyal
completed
all
this
work
and
invited
Kevin
Mattison
to
a
pre-test
inspection
in
2003.
Mr.
Mattison
recommended
a
few
modifications
which
Toyal
completed
prior
to
its
stack
test.
The
stack
test,
which
was
performed
in
July
2003, successfully
demonstrated
compliance
-11-
with
both
the
capture
and destruction
efficiency
requirements
of
the
Subpart
TT
rules.
Illinois
EPA
accepted
the
stack
test
results
and
issued
a
Federally
Enforceable
State
Operating
Permit
(“FESOP”)
in
November
2003.
(Resp.
Exhibit
18).
III.
ARGUMENT
Toyal
does
not
dispute
that
itwas
not
in
compliance
with
the
Subpart
TT rules
from
1995
through
1998,
or
that
it
did
not
demonstrate
compliance
until
April
2003.
But, even
though
it
took
several
years
for Toyal
to
demonstrate
complete
compliance,
its
efforts
over
the years
in
trying
to
understand
its
own
systems
and
how
it
could
achieve
compliance,
did
result
in
improvements
in
controlling
its emissions
along
the
way.
While
Complainant
scathingly
denounces.
Toyal’s
delay
in
compliance
and
demands
a
substantial
penalty,
the
evidence
before
the
Board
shows
that Toyal’s
delayed
compliance
was
not
due
to
willful
lack
of
due
diligence
or
contempt
for
the
rules,
but,
instead,
to
the
complex
and
technical
issues
which
it
faced.
Tellingly,
Complainant
did
not
present
any
evidence
or
witnesses
at
the
hearing
or
elsewhere
in
the
record
to
refute
the
mitigating
evidence
presented
by Toyal
regarding
the
uniqueness
of
its
operations,
and
the
understandable
reasons
for
Toyal’s
delay
in
demonstrating
compliance
with
Subpart
TT
rules.
As
explained
below,
this
is
not
a
case where
the
Subpart
TT
rules
were
written
for
a
specific
type
of
facility
but,
rather,
the
rules
were
meant
to
apply
to
many
different
types
of
facilities.
Consequently,
an
easy
cookie-cutter
approach
to
compliance
could
not
be
used
for
all
facilities,
especially
for
Toyal,
where
there
were
several
unique
factors
which
complicated
its
ability
to
demonstrate
compliance.
Complainant’s
proposed
civil
penalty
is
inappropriate
because
its
analysis
of
the
Section
33(c)
and
42(h)
factors
fails
to
accurately
assess
all
the
relevant
facts
in
this
matter
and
would
not
aid
in
enforcement
of
the
Act
Specifically,
Complainant’s
analysis
of
the
relevant
factors
-12-
fails
to take
into
account
many
mitigating
factors
that
should
weigh
significantly
in the
Board’s
assessment
of whether
a
penalty
is appropriate
in
this
case;
among
other
issues:
•
Toyal
has
been
compliant
with
the
Subpart
TT
rules
for
well
over
five
years;
•
Toyal
has
operated
a
control
device
since
1998;
• Toyal
employs
over
89
people
at
its
facility
and,
thus,
has
a
positive
social
value;
•
Toyal’s
compliance
efforts
were
frustrated
by
the
overall
complexity
of
its
operations,
and
delays
caused
by
the
fires
and
explosions;
and
•
Toyal
spent
years
and
considerable
sums
on
consultants
in
its
diligent
pursuit
of
full
compliance.
Finally,
Toyal
did
not
experience
an economic
benefit
because
of
its
noncompliance.
On
the
contrary,
Toyal
experienced
an
economic
loss
because
it
spent
over
$1
million
dollars
in
purchasing
a vacuum
skid
condenser
that
was
intended
to be
used
to
achieve
compliance,
as
recommended
by
its
then-consultant,
Chemstress
Engineering.
However,
it was
later
discovered
that
the
vacuum
skid
condenser
was
not
needed
for
compliance.
In
addition
to
the
above,
Toyal
experienced
a further
loss
of
over
$1
million
due
to
its inability
to
efficiently
reclaim
its
spent
solvent.
Complainant’s
economic
benefit
analysis
is
inappropriate
because
it
fails
to
consider
Toyal’s
true
cost
of
coming
into
compliance.
Thus,
as
presented
below,
Mr.
McClure’s
economic
benefit
analysis
is
the more
appropriate
analysis
because
it captures
Toyal’s
true
cost
of
coming
into
compliance
consistent
with
generally-accepted
financial
principles and
relevant
U.S.
EPA
guidance.
-
13 -
A.
TOYAL
WAS
DILLIGENT
IN
ITS
EFFORTS
TO
COME
INTO
COMPLIANCE,
IN
LIGHT
OF
THE
UNIQUE
CIRCUMSTANCES
INHERENT
IN
ITS
BUSINESS
OPERATIONS
THAT
COMPLICATED
ITS
COMPLIANCE
SCHEDULE
Toyal’s
delay
in demonstrating
compliance
was
a
result
of
several
unique
factors,
many
of
which
were
beyond
Toyal’s
control
and
took
considerable
time,
expense
and
effort
to
overcome.
The
factual
overview
presented
above
regarding
the
operational
issues
and
compliance
history
of
the
Toyal
facility,
while
lengthy,
is
important
background
information
that
is
necessary
to
fully understand
the
constraints
and
challenges
that
Toyal
strove
to
overcome
during
the
period
of
non-compliance,
for
the
purpose
of
determining
an
appropriate
penalty,
if
any.
To
the
extent
possible,
Respondent
will
refrain
from
repeating
the
above-mentioned
facts
in
offering
its
justification
as
to
the
appropriateness
of
a
modest,
if
any,
penalty
in
this case.
As
discussed
below,
the
first
mitigating
factor
was
the
complexity
of
Toyal’s
manufacturing
operations,
which
include
a
substantial
number
of
sources
and
batch
processes.
The
second
factor
is
that
although
Toyal
worked
with
competent
environmental
consultants
who
were
experienced
with
industrial
air
permitting
issues,
these
consultants
did
not
fully
understand
Toyal’s
unique
issues,
and Toyal
went
through
a
number
of
different
consultants
before
hitting
upon
a
winning
team
and
compliance
strategy
for
its
complex
facility.
The
third
factor
relates
to
the
inherent
dangers
associated
with
Toyal’s
manufacturing
operations,
which
are
important
to
this
case
mostly
because
the
Complainant
misunderstands
and
oversimplifies
the
challenges
that
Toyal
faced
in
achieving
compliance
in
light
of
these
issues.
Finally,
the
involvement
of
Illinois
EPA
in
working
with
Toyal
in
furtherance
of
its
struggle
to
achieve
compliance,
and
Illinois
EPA’s
continued
acquiescence
and
assistance
offered
to
Toyal,
refutes
Complainant’s
contention
that
Toyal
was
dragged
kicking
and
screaming
into
compliance
after
years
and
years
of
ignoring
-
14-
its
compliance
obligations.
These
reasons,
and
others
discussed
further
below,
all weigh
in
favor
of
leniency
in
the
Board’s
penalty
determination
in
this
matter.
1.
Toyal’s
Manufacturing
Operations
are
Complex
and
Unique
The
sheer
complexity
of
Toyal’s
manufacturing
operations
is
probably
the
most
important
reason
why
Toyal’s
compliance
with
Subpart
TT
required
an unusually
large
amount
of
time
to achieve
total
compliance.
Among
other
factors,
the
facility
is
unique
in
the
large
number
of
emission
units
and
its
batch
processing
operations
which
complicated
its
compliance
activities.
(Tr.,
12/11/08,
p.
66:20-70:5).
As
Mr.
Steve
Anderson
of
Admiral
Consulting
testified
at
the
hearing:
“It
took
me
a
while
to
figure
out
what
the
processes
were,
how
they
worked,
how
they
could
interconnect
between
each
other.
It
was
a
very
complicated
process
and
it
was
going
to
be very
complicated
to
show
compliance
with
the
regulations.”
(Tr.,
12/11/08,
p.
6.7:14-18).
Specifically,
there
are
well
over
200
VOM
sources
at
the
Toyal
facility
(Tr.,
12/11/08,
p.
68:21-69:1).
However,
only
129
of
those
sources
were
actually
tied
into
the control
device.
(Tr.,
12/11/08,
p.
69:2-3).
Additionally,
Toyal’s
facility
is
a
batch
processing
operation.
(Tr.,
12/11/08,
p.
69:2-3).
As
a
result,
there
were
approximately
seven
to
nine batch
operations,
of
which
all
or
none
might
be
operating
at
the
same
time.
(Tr.,
12/11/08,
p.
69:23-70:5).
This
was
an
enormous
challenge
in
determining
how
Toyal
would
approach
the
compliance
testing.
(Tr.,
12/11/08,
p.
69:18-21).
As
further
explained
by
Mr.
Anderson
at
the
hearing:
“So
one
of
my
main
concerns
initially
was
if
you’re
going
to
demonstrate
compliance,
you
have
to
be
at
maximum
capacity,
how
are
you
going
to
tell
if
you
are
at
maximum
capacity,
what
products
are
you
going
to
be
doing,
can
you
have
all nine
-15-
operations
going
on
at
the
same
time,
you
know.
What
is
exactly
going
to
be
needed
to
demonstrate
compliance.”
(Tr.,
12/11/08,
P.
70:11-17).
One
of
the
biggest
challenges
that
Toyal
had
to
deal
with
was
that
there
was
little
process
data
available,
due
to
the
unique
nature
of
its
operations.
(Tr.,
12/11/08,
p.
71:15-18).
While
Toyal
had
some
historical
data
regarding
certain
pieces
of
equipment,
it
didn’t
know
what
product
was
being
made
while
the
test
was
being
run
because
that
information
had
not
been
recorded.
(Tr.,
12/11/08,
p.
71:22-72:2).
Thus,
Toyal
couldn’t
determine
if
the
equipment
was
being
run
at
maximum,
normal,
or
some
other
capacity.
(Id.).
Additionally,
Toyal
had
some
historical
data
which
showed
the
VOM
concentration
rate,
but
information
regarding
the
flow
rates
had
not
been
recorded.
(Tr.,
12/11/08,
p.
71:18-21).
Toyal
went
through
the
plant
and
identified
each
process,
what
was
being
emitted,
the
flow
rates,
and
the
emission
points.
(Tr.,
12/11/08,
p.
73:9-11).
Tn
order
for
Toyal
to
complete
the
work
outlined
in
its
May
2001
construction
permit,
it
had
to
determine
the
above
because
up
until
that
point,
the
submitted
CAAPP
permit
was
based
on
engineering
estimates,
and
Illinois
EPA
wanted
actual
data.
Related
to
the
above,
Toyal
also
experienced
challenges
in
determining
what
the
fugitive
emissions
were
from
its
sources
for
which
capture
was
not
feasible.
This
was
something
that
Steve
Anderson
in
all
of
his
years
of
experience
had
never
seen,
and
to
his
knowledge,
neither
had
Illinois
EPA.
(Tr.,
12/11/08,
p.
81:9-13).
Specifically,
Toyal
had
to
devise
an
emission
factor
that
the
facility
was
going
to
produce
itself
because
no
emission
factors
existed
from
the
U.S.
EPA
or
other
published
sources.
(Tr.,
12/11/08,
p.
8
1:17-19).
This,
of
course,
took
time,
as
Toyal
not
only
had
to
determine
the
emission
factor
but
also
had
to
get
Illinois
EPA’s
approval.
(Tr.,
12/11/08,
p.
8
1-82).
However,
Toyal’s
efforts
towards
quantifying
the
controlled
and
uncontrolled
emissions
were
important
because
at
the
conclusion
of
this
-
16
-
process,
Toyal
determined
that
it
could
obtain
a
FESOP
instead
of
a
CAAPP,
because
its
actual
emissions
were
below
25
tons
per
year
of
VOM.
6
(Tr.,
12/11/08,
p.
74:14-23).
As
Toyal
obtained
more
information
regarding
its
facility,
Steve
Anderson
advised
Toyal
that
in
order
for
it
to
demonstrate
compliance
with
the
Subpart
TT
rules,
it
would
have
to
put
in
permanent
total
enclosures
(“PTE”),
or
it
would
have
to
seek
relief
from
the
regulations.
(Tr.,
12/11/08,
p.
90:3-10).
Specifically,
the
PTE
concept
would
satisfy
the
capture
efficiency
part
of
thecontrol
requirements
of
Subpart
TT
rules.
(Tr.,
12/11/08,
p.
85:15-19.).
Once
it
understood
what
would
be
required,
Toyal
opted
for
permanent
total
enclosure,
although
it
was
advised
that
it
would
be
very
costly
and
would
be
a
very
complicated
process.
(Tr.,
12/11/08,
p.
87:20-12).
For
example,
this
included
designing
and
installing
PTEs
to
capture
emissions
from
numerous
sources,
including
the
screeners
and
the
tank
farm,
which
were
originally
not
proposed
for
control.
(Tr.,
12/i
1/08,
p.
86:10-88:8).
As
noted
above,
in
addition
to
the
engineering
challenges
of
demonstrating
compliance
and
designing
and
installing
PTE
for
all
of
its
sources,
Toyal
was
also
involved
in
the
aftermath
of
investigating
the
cause
of
the
fires
at
its
facility,
and
responding
to
insurance
companies
and
OSHA
regarding
the
fire
incidents.
As
a
result,
Toyal
had
to
request
several
extensions
from
Illinois
EPA.
(Resp.
Exhibits
9
and
10).
Toyal
contacted
Eric
Jones
of
Illinois
EPA
and
requested
extensions
to
complete
the
work
set
forth
in
its
2001
construction
permit.
(Tr.,
12/11/08,
p.
94:14-20).
Toyal
requested
two
extensions,
on
February
26,
2002
(Resp.
Exhibit
9)
and
August
19,
2002
(Resp.
Exhibit
12)
6
With
respect
to
completing
the
permit
application,
a
FESOP
and
a
CAAPP
application
basically
involve
the
same
amount
of
work.
In
fact,
the
application
is
similar
and
the
same
forms
are
used.
Contrary
to
Complainant’s
implications,
Toyal
lost
no
time
in
reaching
compliance
by
switching
from
pursuit
of
a
CAAPP
to
a
FESOP
along
the
way,
as
all
of
the
underlying
work
needed
to
support
the
application
was
the
same.
-17-
respectively.
Illinois
EPA granted
these
extensions
with
some
conditions.
(Resp.
Exhibits
11
and
17).
Toyal
demonstrated
compliance
and
Illinois
EPA
issued
its
FESOP
application
on
November
25,
2003.
(Tr.,
12/11/08,
p.
100:10-23
and
Resp.
Exhibit
18).
One
of
the
most
important
things
to
be
understood
is
that
Toyal
lacked
any
reference
or
model
to
rely
upon
for
the
obstacles
that
it
encountered
in demonstrating
compliance.
For
example,
Toyal’s
competitors,
Siberline
and
Eckhard,
were
located
in
areas that
did
not
require
VOM
emission
controls.
(Tr.,
12/11/08,
p.
88:l7-89:1).
Consequently,
they
were
not
subject
to
the
VOM
rules.
Furthermore,
in
Illinois
the
Subpart
TT
rules
involved
a
lot
of
different
sources.
(Tr.,
12/11/08,
p.
67:2-5).
None
of
these
sources
involved
a facility
like
Toyal.
Therefore,
what
may
have
worked
for
other
sources
would
not
apply
to
a
unique
facility
such
as
Toyal.
In
sum, although
Toyal
may. have
taken
some
years
to
demonstrate
compliance
through
a
stack
test
to
satisfy
the
Subpart
TT
rules,
it
had
legitimate
reasons
for
the
time
it
took
to
reach
full
compliance,
most
of
which
were
a
function
of
the
extreme
complexity
of
its
operations
and
the
difficulty
of
effectively
controlling
the
facility’s
emissions.
2.
Toyal
Hired
Competent
Consultants
But
Unfortunately,
They
Did
Not
Fully
Understand
Toyal’s
Operations
and
What
It
Would
take
to
Demonstrate
Compliance
with
Subpart
TT
Although
Toyal
hired
competent
engineering
consultants,
many
of
which
were
nationally-recognized
finns, and
with
which
Toyal
had
had
prior
successful
experiences
on
other
issues,
it
took several
tries
to
find consultants
who
were
able
to
understand
Toyal’s
unique
operational
challenges
and
devise
an
effective
compliance
plan.
As
explained
in
detail
above,
Admiral
Consulting
was
able
to
obtain
infonnation
through
a
Freedom
of
Information
Act
request
information
regarding
one
other
facility
that
received
a
similar
violation
notice..
It
was
located
in
an
non-attainment
area
for
VOM.
However,
by
the
time
that
Admiral
Consulting
received
the
information,
the
facility
appeared
to
have
closed
down.
Additionally,
it
did
not
appear
that
they
had
any
of
the
control
requirements
as
applied
to
Toyal
here
in
Illinois.
(Tm.,
12/11/08,
p.
89:2-15).
-18-
Toyal
began
with
Montgomery
Watson,
which
assisted
Toyal
with
its
CAAPP
application
and
proposed
compliance
plan.
(Tr.,
12/10/08,
p.
179:21-180:15;
Tr.,
12/10/08,
p.
158:10-14).
Montgomery
Watson’s
responsiveness
was
unsatisfactory
(Tr., 12/10/08,
p.
158:17-159:5),
and
so
Toyal
moved
on
to
Woodward-Clyde
in
January
1997
to
design
and
implement
a compliance
plan.
(Tr.,
12/10/08,
p.
159:17-23).
Based
on
Woodward-Clyde’s
investigations,
Toyal
followed
its
recommendations,
obtained
the
necessary
construction
permits,
and
installed
the
RCO
and
associated
capture
points
and
ductwork.
(Tr.,
12/10/08,
p.
160:4-13).
Although
the
RCO
began
operating
in
early
December
1998,
the
planned
stack
test
scheduled
for later
that
month
never
occurred,
as
the
pre-stack
test
inspection
by
Illinois
EPA
revealed
a
number
of
concerns.
(Resp.
Exhibit
7,
p.
4).
Because
Woodward-Clyde
had
apparently
failed
to
adequately
consider
how
Toyal
would
demonstrate
capture
efficiency
of
the
system,
and
did
not
give
Toyal
confidence
that
it
could
bring
Toyal
into
compliance,
Toyal
had
to
replace
Woodward-Clyde
as
well.
(Tr.,
12/10/08,
p.
166:2-10).
While
Toyal
continued
to
operate
the
RCO,
Toyal
was
required
to
rethink
how
it
was
going
to
go
about
demonstrating
compliance
with
the
Subpart
TT rules,
and
continued
to
search
for
a
consultant
that
would
be
able
to
meet
this
challenge.
Toyal
first
used
Chemstress
(Tr.,
12/11/08,
p.
20:8-15)
to
identify
source
points
and
engineer
capture
solutions
in
response
to
Mr.
Mattison’s
comments
because
they
were
on site
and
already
had
knowledge
about
Toyal’s
various
processes.
(Tr.,
12/10/08,
p.
118:20-119:1).
Chemstress
recommended
the
use
of
a
vacuum
chiller
system
to
replace
the
numerous
vacuum
pumps
throughout
the
plant
with
a
centralized
vacuum
and
condenser
system
(Tr.,
12/10/08
p.
214:3-13),
which
cost
Toyal
approximately
$1
million
dollars.
(Tr., 12/10/08,
p.
166:24-167:2).
-19-
During
the
2001-2002
time
period,
Toyal finally
was
able
to
retain
two
consultants,
Clean
Air
Engineering
and
Admiral
Consulting,
that
understood
what
it would take for
Toyal
to
demonstrate
compliance.
(Tr.,
12/11/08,
p.37:9-i?).
Based
upon
the
initial
work
of
ARI
and
the
ongoing
input
from
Clean
Air
Engineering,
Admiral
Consulting
devised
a
compliance
plan
using
the
principle
of
PTE,
which
required
that
over
120
pieces
of
equipment
in
Toyal’s
manufacturing
process
either
be
totally
enclosed
or
enclosed
in
such
a
manner
that qualifies
under
the
definition
of
PTE
and
connected
to
the
control
device.
(Tr.,
12/11/08,
p.
3
8:10-17).
After Toyal
modified
its
emission
sources
to
utilize
PTE,
Illinois
EPA
accepted
the
capture
and
control
system
and
issued
a
FESOP
to
Toyal
in
November
2003.
(Resp.
Exhibit
18).
Although
Toyal
was
not
able
to
demonstrate
compliance
following
the
installation
of
the
RCO
in
1999,
the
work
done
by
each
of
its
early
consultants
was
beneficial,
in
that
Toyal
was
able
to
improve
its
understanding
of
its
own facility
and
what
it
would
need
to
address
in
order
to
demonstrate
compliance
with
Subpart
TT.
Each
experience
with
the
above-named
consultants
were
rungs
on
the
ladder
up
to
achieve
full
compliance,
and
were
hardly
wasted
effort,
as
Complainant
wishes
the
Board
to
believe.
Even
more
offensive
in
the
face
of
Toyal’s
extensive
(and
expensive)
efforts at
compliance,
Complainant
contends
that
Toyal
“placed
very
little
value”
on
environmental
compliance
(Complainant’s
Brief,
at
16),
and
characterizes
Toyal’s
efforts
as
“sporadic,
half-hearted
and
ineffective.”
(Id.,
at
20).
Aside
from
Complainant’s
overwrought
hyperbole
in its
brief,
however,
Complainant
offered
no
witnesses
at
the
hearing,
nor
any
other
evidence,
to
disprove
Toyal’s
copious
evidence
of
continuous
good-faith
efforts
to
overcome
its
considerable
challenges
and
move
to
full
compliance
in
a reasonable
manner.
-20-
3.
There
Are
Inherent
Dangers
in
Toyal’s
Manufacturing
Operations
That
Significantly
Complicated
Toyal’s
Compliance
Efforts
The
third
factor
relates
to
the
inherent
dangers
of
fires
and
explosions
in
Toyal’s
manufacturing
operations.
Fires
in
its
paste
operation
have
always
been
a
major
concern
for
Toyal
because,
historically,
that
is
where
a
majority
of
the
fires
have
taken
place.
(Tr.,
12/11/08,
p.
48:14-16).
As
noted
above,
during
the
time
period
from
1996
to
2001,
despite
its
best
efforts,
Toyal
experienced
nine
fires
at
its
facility.
(Resp.
Exhibit
7).
This
time
period
coincided
with
the
time
frame
in
which
Toyal
was
in
the
process
of
trying
to
demonstrate
compliance
with
the
Subpart
TT
rules.
Obviously,
when
fires
and/or
explosions
occur
at
its
facility,
the
priority
of
the
plant
must
be
to
determine
the
root
causes
of
the
accidents
while
the
information
is
fresh.
(Tr.,
12/10/08,
p.
154:19-155:9).
Consequently,
Toyal
was
obligated
to
continue
with
its
efforts
in
determining
how
to
demonstrate
compliance,
while
also
simultaneously
dealing
with
the
afiermath
of
the
nine
fires.
As
previously
noted,
Toyal
is
a
small
plant
in
relation
to
other
similar
plants.
Thus,
when
fires
and/or
explosions
occur
at
its
facility,
it
must
immediately
divert
all
of
its
resources
(including
management,
engineering,
technical,
production,
safety,
health
and
environmental
personnel)
to
investigate
the
accident.
(Tr.,
12/10/08,
p.
154:19-155:9).
Because
of
the
inherent
dangers,
there
is
an
added
level
of
complexity
to
the
projects
undertaken
at
the
Toyal
facility
because
it
requires
that
Toyal
be
very
careful
in
the
design
of
any
of
the
process
equipment
or
connections
to
its
process
equipment.
(Tr.,
12/11/08,
p.
48:21-49:3).
When
projects
are
undertaken,
Toyal
must
review
the
proposed
work
with
the
plant
and
production
personnel
to
evaluate
the
proposed
changes
and
determine
whether
any
changes
or
modifications
would
create
safety
problems.
(Tr.,
12/11/08,
p.
48:21-49:3).
Although
Complainant
tries
to
argue
that
Toyal’s
efforts
were
half-hearted
and
lax,
it
clearly
shows
a
lack
of
understanding
or
appreciation
for
the
technical
constraints
and
challenges
-21
-
that
were
placed
on
Toyal
in
trying
to
achieve
compliance
with
the
Subpart
TT
rules.
For
example,
Complainant
asked
Mr.
Van
Hoose
whether
Toyal
could
have
simply installed
a
flare
to
address
the
VOM
emissions
from
the
air
stripping
of
the
solvent.
(Tr.,
12/10/08
p.
124:1-5).
Complainant’s
implication
that
there
was
such
an
easy
solution
to
Toyal’s
compliance
challenges
completely
ignores
the
inherent
dangers
in
Toyal’s
manufacturing
process,
and
the
fire
and
explosion
incidents
that
occurred
at
the
facility.
As
Mr.
Van
Hoose
testified,
given
the
record
of
fire
incidents
at
the
facility,
use
of
a
flare
would
have
posed
a
serious
concern
to
Toyal’s
operations.
(Tr.,
12/10/08,
p.
132:7-133:18).
Furthermore,
Complainant
fails
to
recognize
that
Illinois
EPA
was
well-aware
of
the
difficulties
faced
by
Toyal.
Moreover,
Toyal
acted
in
good
faith
throughout
the
process
of
non-compliance
by
keeping
the
Illinois
EPA
apprised
of
its
activities
and
even
seeking
guidance
from
Illinois
EPA
as
is
discussed
below.
4.
Illinois
EPA
Was
Aware
of
the
Complications
That
Toyal
Faced
in
Demonstrating
Compliance
Complainant’s
arguments
fail
to
consider
that
Illinois
EPA
was
aware
of
the
complications
that
Toyal
faced
in
demonstrating
compliance.
Again,
Toyal
does
not
dispute
that
it
was
not
in
compliance
with
the
Subpart
TT
rules.
However,
Toyal
did
not
disregard
its
obligations
under
the
Subpart
TT
rules
during
the
noncompliance
period.
On
the
contrary,
as
is
explained
above,
Toyal
took
its
obligations
quite
seriously
as
it
worked
to
understand
the
requirements
of
Subpart
TT
rules
and
how
its
facility
could
meet
its
obligations.
In
fact,
that
is
why
Toyal
communicated
with
the
Illinois
EPA on
many
occasions
during
the
time
period
of
noncompliance
and even
.thereafter.
The
record
before
the
Board
shows
that
Toyal
consistently
kept
Illinois
EPA
apprised
of
its
compliance
activities
while
also
seeking
guidance
and
the
necessary
approvals
from
Illinois
EPA.
In
fact,
the
level
of
interaction
between
Toyal,
its
consultants,
and
Illinois
EPA
was
unusual,
if
not
unprecedented.
Mr.
Steve
Anderson
testified
at
-22
-
the
hearing,
that
it
was
the
highest
level
of
involvement
he
had
ever
had
with
Illinois
EPA.
(Tr.,
12/11/08,
P.
82:21-24).
Toyal
communicated
with
Illinois
EPA
in
written
and
oral
discussions
as
well
as
in-person
meetings
beginning
at
least
since
its
CAAPP
submittal
application.
Toyal’s
written
and
oral
communications
with
Illinois
EPA
regarding
its
compliance
complications
began
after
Illinois
EPA’s
pre-stack
inspection
in
December
1998.
Toyal
sent
a
letter
to
Illinois
EPA
dated
December
23,
1998,
in
which
it
requested
an
extension
to
address
concerns
noted
by
Kevin
Mattison
at
his
pre-stack
test
inspection.
(Resp.
Exhibit
5).
During
the
2002
time
period,
Toyal
sent
a
letter
dated
February
19,
2002
to
Eric
Jones
requesting
an
extension
due
to
an
explosion
and
fire
at
the
facility
that
delayed
the
construction
of
some
pertinent
equipment
which
was
required
to
determine
control
and
efficiency
of
the
operation
to
secure
the
permit.
(Resp.
Exhibit
9
and
Tr.,
12/10/08,
p.
218:8-219:1).
Following
receipt
of
the
letter,
Toyal
had
several
discussions
with
Eric
Jones
regarding
the
request.
(Tr.,
12/10/08,
p.
2
19:2-4).
Mr.
Jones
requested
additional
information
regarding
what
Toyal
had
done
and
what
it
was
doing
in
installing
the
pollution
control
equipment
relative
to
securing
the
permit.
(Tr.,
12/10/08,
p.
219:11-20).
Toyal
provided
the
requested
information
as
set
forth
in
its
letter
dated
February
26,
2002
to
Don
Sutton
copying
Mr.
Jones.
(Resp.
Exhibit
10
and
Tr.,
12/10/08,
p.
2
19:7-24).
Thereafter,
Illinois
EPA
granted
Toyal’s
request
as
provided
in
the
March
8,
2002
revised
construction
permit.
(Resp.
Exhibit
11).
Following
the
revision
of
the
construction
permit,
Toyal
requested
an
additional
extension
on
August
19,
2002
because
the
remaining
part
of
the
expansion
was
behind
schedule
and,
in
order
for
Toyal
to
obtain
the
permit,
it
needed
to
have
all
the
units
in
operation.
(Tr.,
12/10/08,
p.
221:3-16).
Once
again,
Toyal
followed
up
with
Eric
Jones
of
the
Illinois
EPA
and
explained
its
reasons
for
requesting
an
additional
extension.
(Tr.,
12/10/08,
p.
221:20-22).
Per
-23-
these
discussions,
Toyal
submitted
a
request
to
modify
its
permit
in
a
letter
dated
August
19,
2002,.
to
Mr. Sutton,
with
a
copy
to
Eric
Jones.
(Tr.,
12/10/08,
p.
222:2-6
and
Exhibit
12).
Illinois
EPA
requested
additional
information
which
Toyal
provided
and,
thereafter,
Illinois
EPA
granted
Toyal’s
August
19, 2002
request
and,
again,
issued
a revised
construction
permit
dated
November
18,
2002.
(Tr.,
12/10/08,
p.
222:15-24
and
Resp.
Exhibit
14).
In
addition
to
the
requests
for
extensions,
Toyal
also
communicated
with Illinois
EPA
regarding
particular
incidents
andlor
other
requests.
For
example,
Toyal
had
to
report
each
outage
of
the
RCO
those
to
the
Illinois
EPA.
(Tr.,
12/10/08,
p.
112:18-19).
Further,
as
Toyal
proceeded
to
implement
additional
capture
and
control
and
other
refinements,
the
original
engineering
estimates
that
were
used
in
the
Title
V
application
described
previously
and
in
the
May
30,
2001 construction
permit
application
changed
and
were
replaced
by
actual
engineering
data.
(Tr.,
12/10/08,
p.
217:12-17).
Toyal
had
discussions
with
Eric
Jones
regarding
those
changes.
(Tr.,
12/10/08,
p.
218:5-12).
When
Toyal attempted
to
determine
and gather
specific
data
regarding
fugitive
emissions
from
the
sources
that
were
not,
feasible
to
capture
and
control,
Steve
Anderson
engaged
in
discussions
with
Eric
Jones
and
Kevin
Mattision
regarding
the
concept
of
applying
emission
factors
that the
facility
itself
was
going
to
produce,
given
that
there
were
no
emission
factors
available
from
U.S.
EPA
or
other
sources.
(Tr.,
12/11/08,
p.
8
1:5-
82:20).
These
factors
were
ultimately
used
in
the
FESOP
application
and
were
accepted
by
the
Illinois
EPA.
In
addition
to
its
oral
and
written
communications,
Toyal
had
several
meetings
with
Illinois
EPA
in
which
it
actively
sought
the
advice
of
the
Illinois
EPA.
Begim’iing
with
the
installation
of
its
RCO
in
December
1990,
Toyal
invited
Mr.
Kevin
Mattison
to
a
pre-stack
test
inspection;
Subsequently,
Toyal
had
a
meeting
with
Illinois
EPA
and
the
Attorney
General’s
-24-
Office
on
November
1,
2000,
in
which
it
presented
proposed
plans
to
apply
for
a
construction
permit
that
included
the
B-unit
expansion
project,
the
modifications
it
needed
to
show
compliance,
and
other
related
activities,
all
in
one
application.
(Tr.,
12/11/08,
p.
75:18-19).
Illinois
EPA
gave
its
approval
thereafter
and
Toyal
submitted
its
permit
application
in
January
2001.
(Tr.,
12/11/08,
p.
76:15-16).
Toyal
followed
up
with
Eric
Jones,
the
Illinois
EPA
permit
engineer,
on
several
occasions
during
the
90-day
review
period,
to
confirm
the
status
of
its
application
and
determine
whether
Illinois
EPA
had
any
questions.
(Tr.,
12/11/08,
p.
76:16-23).
Mr.
Harish
Desai
and
Eric
Jones
of
the
Illinois
EPA
conducted
a
site
visit
in
May
2001
and,
thereafter,
Illinois
EPA
issued
the
permit
on
May
30,
2001.
(Tr.,
12/11/08,
p.
77:5-11
and
Resp.
Exhibit
17).
Toyal
also
invited
Kevin
Mattison
and
Anju
Mathia
of
Illinois
EPA
for
a
pre-stack
test
inspection
when
it
had
completed
all
the
work
in
connection
with
its
FESOP
application
in
2003.
(Tr.,
12/10/08,
p.
224:2-18).
Based
on
the
above,
it
is
evident
that
Toyal
exercised
good
faith
and
cooperation
as
Toyal
consistently
kept
Illinois
EPA
apprised
of
the
challenges
that
it
encountered,
and
also
sought
guidance
and
the
necessary
approvals
from
Illinois
EPA
regarding
Toyal’s
compliance
activities
with
Subpart
TT
rules.
The
fact
that
Illinois
EPA
had
knowledge
as
to
the
challenges
and
circumstances
faced
by
Toyal,
and
that
it
granted
the
extension
requests
as
set
forth
above,
provide
context
for
Toyal’s
delayed
compliance
with
Subpart
TT.
Further,
it
is
important
that
as
time
passed,
Illinois
EPA
became
more
familiar
with
the
regulators
and
became
better
acquainted
with
what
was
really
going,
on
at
the
facilities.
(Tr.,
12/11/08,
p.
65:11-24).
As
stated
aptly
by
Steve
Anderson
at
the
hearing,
“It
was
a
learning
process
for
everybody
involved.”
(Tr.,
12/11/08,
p.
65:24-66:1).
As
previously
discussed,
the
generic
Subpart
TT
rules
were
not
written
specifically
for
a
facility
such
as
Toyal’
s.
Rather,
the
-25-
generic
Subpart
TT
rules
were
meant
to
apply
to
many
different
sources
and,
therefore,
it
is
understandable
that
there
would
be
unknowns
and
questions
as
to
how
the
rules
would
apply
to
specific
sources.
That
is
exactly
what
happened
in
this
matter.
However,
in
Toyal’s
case,
there
were
many
questions
and
many
unknowns
that
Toyal
had
to
work
through
in
order
to
achieve
compliance
with
the
Subpart
TT
rules.
B.
THE
CIVIL
PENALTY
IMPOSED
SHOULD
REFLECT
TOYAL’S
GOOD
FAITH
EFFORTS
AND
THE
UNIQUE
CIRCUMSTANCES
AFFECTING
TOYAL’S
ABILITY
TO
DEMONSTRATE
COMPLIANCE
A
substantial
penalty
should
not
be
imposed
in
this
matter
because
Toyal
was
diligent
in
its
efforts
to
bring
its
operations
into
conformity
with
the
Subpart
TT
rules,
and
its
delayed
compliance
was
due
to
the
unique
circumstances
as
set
forth
above.
Illinois
courts
have
often
stated
that
the
primary
purpose
of
the
civil
penalties
is
to
aid
in
enforcement
of
the
Act.
ESG
Watts,
Inc.,
v.
Illinois
Pollution
Control
Board,
668
N.E.2d
1015,
1021,
282
Iii.
App.
3d
43,
52
(4th
Dist.
1996).
The
imposition
of
the
statutory
maximum
penalty
is
clearly
not
appropriate,
and
even
Complainant
has
not
made
such
a
request.
However,
Complainant’s
demanded
penalty
is
still
greatly
excessive
in
light
of
the
circumstances
in
this
matter,
after
taking
considering
the
factors
provided
in
Section
33(c)
and
42(h)
Act.
415
ILCS
5/33(c),
42(h)(2007).
There
is
nothing
in
the
record
which
indicates
that
Toyal
was
dilatory
or
recalcitrant;
on
the
contrary,
the
record
shows
that
Toyal
was
sincerely
trying
to
come
into
compliance.
It
is
long-established
policy
of
the
Board
not
to
penalize
those
who
are
honestly
trying
to
comply.
Southern
illinois
Asphalt
Company,
v.
illinois
Pollution
Control
Board,
60
Il1.2d
204,
216,
326
N.E.2d
406,
4
12-413
(1975)
(citing
Employees
of
Holmes
v
Merland,
Inc.,
PCB
71-39
Slip
Op.
*5
(September
16,
1971)).
Moreover,
as
explained
below,
Toyal
did
not
enjoy
an
economic
benefit
from
its
noncompliance
period
when
taking
into
account
all
of
the
expenditures
it
incurred
specifically,
including
the
expenses
of
the
vacuum
-
26
-
chiller
unit
which
cost
Toyal
$1
million,
and
the
lost
savings
as
a
result
of
its
inability
to
use
the
solvent
recovery
system.
1.
Complainant’s
Requested
Civil
Penalty
is
Excessive
and
Inappropriate
Due
To
Lack
of
Evidence
of
Willful
Noncompliance
To
assess
a
civil
penalty
in
the
amount
of
$716,440.00
and,
moreover,
the
added
$400,000
to
deter
future
violations,
as
demanded
by
Complainant,
would
be
completely
inappropriate
in
this
matter.
The
record
before
the
Board
shows
that
Toyal
was
diligent
in
its
compliance
efforts
despite
all
the
complexities
and
challenges
it
faced.
Further,
Toyal
continuously
engaged
the
Illinois
EPA
as
to
what
it
was
doing,
and
sought
assistance
and
the
necessary
approvals
as
it
worked
to
demonstrate
compliance.
This
is
not
like
other
enforcement
actions
when
the
alleged
violator
failed
to
show
good
faith
and
completely
disregarded
its
obligations
in
attempt
to
skirt
the
regulations.
See
People
v.
Jersey
Sanitation
Corporation,
PCB
97-2
Slip.
Op
*8
(June
16,
2005).
Tn
Jersey
Sanitation,
the
Board
noted
that
on
only
one
occasion
upon
which
the
Illinois
EPA
inspected
the
Site
were
there
no
violations.
Further,
the
Board
noted
that
the
respondent,
Jersey
Sanitation,
failed
to
act
in
good
faith
and
that
it
did
not
show
that
its
failure
to
comply
with
regulations
was
simply
inadvertent.
Id.
at
*9•
Here,
Toyal
was,
in
good
faith,
trying
to
comply
with
the
Subpart
TT
rules,
and
it
had
legitimate
reasons
for
its
delay
in
demonstrating
full
compliance.
Tellingly,
Complainant
has
presented
no
evidence
to
the
contrary.
Toyal
consistently
operated
a
control
device
at
its
facility
since
December
1998
to
the
present.
Further,
it
is
evident
that
Toyal’s
delayed
compliance
in
understanding
and
implementing
the
necessary
modifications
at
its
facility
to
conform
to
the
Subpart
TT
rules
was
successful,
because
it
has
never
received
any
notice
of
violation
or
other
enforcement
action
since
the
filing
of
the
complaint
in
this
matter
on
May
31,
2000.
(Tr.,
12/10/08,
p.
173:4-10).
Consequently,
there
is
no
need
to
deter
future
violations
because
there
-27-
have
been
none,
and
more
importantly,
no
evidence
of
willful
noncompliance
or
any
implication
otherwise
that
Toyal
will
not
continue
to
be
in
compliance.
To
the
contrary, to
impose
a
substantial
penalty
in
this
matter
would
deter
future
facilities
subject
to these
rules
from
making
the
good
faith
efforts
demonstrated
by Toyal
as
it strove
to achieve
full compliance.
2.
Complainant’s
Requested
Civil
Penalty
Would
Be
Detrimental
to
Toyal’s
Already
Ailing
Business
Operations
A
substantial
penalty such
as
that requested
by
Complainant
would
have
a detrimental
effect
on Toyal’s
business
and
its
employees.
Toyal
operates
as a stand-alone company.
As
testified
to
by Mr.
Van
Hoose
at the
hearing:
Q.
Mr.
Van
Hoose,
you
stated
that
you’re
a stand
alone
company,
although
owned
eventually
by
Toyo
in Japan,
correct?
A.
Correct.
Q.
Where
do
you
get your
financing
from?
A.
We
finance
our
own.
Q.
Okay.
When
you
need
to
make
a
large
capital
expenditure,
where
do
you get
the
money
from?
A.
Banks.
(Tr.,
5/10108
p.
174:16-175:1).
Unfortunately,
the
economy
has
had a
negative
impact
on
Toyal’s
business.
As of
the
time
of the
hearing,
in
December
2008,
Toyal’
s business
was
already
suffering
in
this
economic
turmoil
as
testified
to
by
Mr.
Van
Hoose.
Q:
Since
you
sell
to ---your
product
is
used
in
the
automotive
industry,
is
the recent
widely
publicized
woes
of the
auto
industry
having
an
impact
on
your
operation?
A:
Absolutely.
Q:
Would
you
describe
that
impact?
-
28 -
A:
Yes.
Let
me
explain,
first,
that
we’ve
had
to
reduce
our
manpower.
We’ve
had
to
lay
off
both
salary
and
hourly
employees.
We’ve
dropped
our
employment
from
109
at
the
beginning
of
the
year
down
to
89
people.
We’re
hoping
to
remain
there.
For
example,
December,
as
the
year
went
on,
the
auto
industry
has
gotten
worse
and
worse.
A
lot
of
companies
have
--
or
plants
of
the
automotive
companies
have
shut
down
and
they’ve
also
canceled
their
orders
to
their
customers
who
are
our
customers.
And
in
these
are
paint
plants.
And
they
have
since
cancelled
their
orders.
As
an
example,
this
month
we
are
going
to
run
our
paste
units
at
about
20
percent
capacity
and
10
percent
of
that
capacity
is
just
orders
that
were
left
over
from
November
that
were
postponed:
So
we
only
have
a
small
number
of
orders
for
this
month.
We’re
going
to
actually
Shut
down
our
plant
on•
the
19th
and
reopen
on
the
2nd
of
January.
Normally,
we
operate
between
the
holidays
and
just
be
off
on
the
holidays.
As
far
as
the
—
addition,
on
the
financial
side,
our
company
has
been
extremely
impacted
by
the
economy.
We’re
going
to
lose
over
$3
million
this
year.
(Tr.,
12/10/08,
p.
143:11-144:17).
In
these
challenging
economic
times,
companies
such
as
Toyal
that
provide
good
jobs
and
benefit
the
community,
need
a
helping
hand
from
the
government,
not
the
punitive
hand
that
the
Complainant
wishes
to
extend
to
Toyal,
especially
under
the
circumstances
where
Toyal
has
been
in
compliance
and
has
expended
a
significant
amount
of
resources
to
meet
and
exceed
its
compliance
obligations.
While
Complainant
refuses
to
acknowledge
that
Toyal’s
current
financial
position
is
an
appropriate
factor
to
be
considered
in
the
penalty
analysis,
such
information
is
clearly
relevant,
as
determined
by
the
Board’s
Hearing
Officer.
(Tr.,
12/10/08,
p.
145
:1-146:10).
On
the
other
hand,
to
the
extent
that
Complainant
seeks
to
insert
the
issue
of
the
financial
status
of
Toyal’s
Japanese
parent
company,
Toyo
Aluminum
KK
and!or
its
parent,
Nippon
Light
Metals
Group,
into
the
penalty
calculation
debate
(See
Complainant’s
Brief,
at
21),
this
is
-29-
improper
and
should
be
ignored
by
the Board.
Complainant
has
presented
absolutely
no
evidence
that
Toyal’s
parent
corporation(s)
have integrated
financial
relationships.
Nor
has
it
set
forth
any
legal authority
as
to
why
the
parent
corporation
should
be
responsible
for
a
stand-alone
company
under such
circumstances.
In
Charter
Hall
Homeowner
‘s
Association
v.
Overland
Transportation
System,
Inc.,
PCB
98-91
*10
(Slip.
Op.
May
6,
1999),
the
complainant
similarly
attempted
to
argue
that
the
proposed
penalty
was
warranted
based
on
the
gross
profits
of
the
respondent’s
parent
company.
However,
the
Board
rejected
that
argument
because
the
complainant
failed
to
prove
that
the
parent
corporation
was
responsible
for the
violations
or
demonstrate
that
this
information
was relevant
to
the
penalty
to
be
imposed
on
the
respondent.
Here,
Complainant
has
not set
forth
any evidence
in
the
record before
the
Board
that
shows
that
Nippon
Light
Metals
was
responsible
for
the
violations
or
even
had
daily
involvement
in
affairs
at
Toyal.
In
fact, the
evidence
in
the
record
shows
that
Toyal
operates
as
an
independent
entity
that
seeks financing
on its
own
from
banks.
(Tr., 5/10/08
p.
174:16-175:1).
Notwithstanding
those
issues,
Complainant
does
not
even
offer
any
competent
information
regarding
the
actual
financial
health
of
any
of
these
companies,
but
seeks
only to
prejudice
the
Board
against
Toyal
by
citing
to
data
on
total
global
of
Nippon
Light
Metals
Group,
which
by
itself
has
no intrinsic
bearing
on
the
financial
strength
of
a
company.
Complainant’s
transparent
attempt
to
leverage
such
irrelevant
financial
information
to
support
an
inflated
penalty
is
improper,
and
should
not
be
condoned
by
the
Board.
3.
The Act
Requires
That
the
Board
Consider
the Factors
Provided
in
Section
33(c)
to
Determine
Whether
a
Penalty
Should
Be
Assessed
in
this
Matter
Before
determining
any
penalty
for
violations
under
the
Act,
the
Board
must
consider
the
factors
set
forth
in
Section
33(c)
of
the
Act.
People
v.
State
Oil
Company,
PCB
97-103,
Slip.
-
30-
Op.
at
*11
(March
20,
2003).
While
the
Board
sometimes
applies
the
Section
33(c)
factors
to
each
and every
alleged
violation,
the
Board
does
not do
so
in
every
case.
Rather,
the
Board
may
apply
the
Section
33(c)
factors
to
the totality
of the
alleged
violations.
People
v.
Waste
Hauling
Landfill,
Inc.,
PCB
95-91,
*20
(May
21, 1998).
Section
33(c)
of the
Act provides
that:
In
making
its
determination,
the
Board
shall
take
into
consideration
all
the facts
and
circumstances
bearing
upon
the
reasonableness
of the
emissions, discharges
or
deposits
involved
including
but
not
limited
to:
(i)
the
character
and
degree
of
injury
to, or
interference
with
the
protection
of
the
health,
general
welfare
and
physical
property
of
the
people;
(ii)
the
social
and economic
value
of the
pollution
source;
(iii)
the suitability
or
unsuitability
of
the
pollution
source;
(iv)
the
technical
practicability
and
economic
reasonableness
of reducing
or
eliminating
the
emissions,
discharges
or
deposits
resulting
from
such
pollution
source;
and
(v)
any
subsequent
compliance.
415
ILCS
5/33(c)(2007).
Additionally,
as
stated
by
the
Illinois
Supreme
Court
in discussing
the
Section
33(c)
factors,
“The
Board
is not
limited,
however,
to
the
consideration
of
the
specified
areas,
but,
it is
required
to
consider
all facts
and
circumstances
bearing
upon
the reasonableness
of
the
conduct.”
Southern
Illinois
Asphalt
Company
v.
Pollution
Control
Board
60
Ill.2d
204,
208,
326
N.E.2d
406,
408
(1975).
Based
on
the
above,
Toyal
respectfully
requests
that
the
Board
consider
all
the
facts
and
circumstances
presented
in this
case,
including
the evidence
in
the record
that
shows
that
Toyal
acted
in
a
reasonable
manner
based
on
the
unique
challenges
it
faced
in demonstrating
the
capture
efficiency
requirements
of the
Subpart
TT
rules.
Finally,
while
it
is
true
that
the
severity
of the
penalty
should
bear
some
relationship
to the
seriousness
of the
infraction
or
conduct,
the
Board
should
also
consider
good
faith
or
lack
therof
to
the
issue
of
whether
a
-31-
penalty
should
be imposed.
Modine
Manufacturing
v. Illinois
Pollution
Control
Board,
193
Iii.
App.3d
643,
649,
549
N.E.2d
1379,1383
(2d
Dist.
1990)
(citing
Archer
Daniels
Midland v.
Pollution
Control
Board,
149
Iii.
App.
3d
301,305,
491
N.E.2d
580
(1986)).
4.
Complainant
Misconstrues
the
Character
and
Degree
of
Injury
to,
or
Interference
with
the
Protection
of
the
Health,
General
Welfare
and
Physical
Property
of
the
People
Complainant’s
arguments
that
Toyal’s
eight
years
of
alleged
noncompliance
impeded
federal
and
state
efforts
to
reduce
the
sources
of
VOM
levels,
and
thereby
seriously
interfered
with
the
“protection
of
the
health,
general
welfare
and
physical
property
of
the
people”
mischaracterizes
the
facts
in this
matter.
(Resp.
Br.,
p.1
0).
To
state
that
“Toyal was
operating
equipment
that
emitted
VOM
without
providing
the
environmental
protections
that
the
Board
intended”
further
mischaracterizes
several
important
facts
in
this
matter.
First,
Toyal
operated
a
control
device
since
December
1998.
Second,
as
explained
at
the
hearing,
it
was
very
important
for
Toyal
to continue
to operate
because
such
was
essential
to
its
ability
to
demonstrate
compliance.
As
Mr.
Dennis
Debrodt
testified
at the
hearing:
“Actually,
having
the
plant
operating
was
essential
in being
able
to
size
the
equipment
and
understand
what
was
going
on
with
the
equipment.
You
know,
we
needed
to
do
the
testing
of
the
flow
and
the
loading
to understand
whether
or
not
our
sizing
was
adequate
or
not.
So
from
my
standpoint,
having
the
plant
operating
was
very
important.”
(Tr.,
12/11/08,
p.
57:23-58:17).
Furthermore,
this
case
differs
from
other
cases
where
there
was
testimony
from
Illinois
EPA
inspectors
and
inspection
reports
that
there
was
serious
impacts
to the
physical
property
and
surrounding
areas
due
to the
respondent’s
noncompliance,
which
would
continue
into
the future.
See
People
v.
Waste
Hauling
Landfill,
PCB
95-91
Slip.
Op.
*21
(May
21,
1998).
Unlike
the
respondent
in
Waste
Hauling
Landfill,
whose
activities
resulted
in a
landfill
that
greatly
exceeded
-32-
the
dimensions
allowed
in
its permit,
continual
leachate
problems,
and
issues
related
to
the
disposal
of
hazardous
waste
into
an
unpermitted
waste
facility,
here,
Complainant
has
not
evaluated
the
level
of
emissions
or
whether
•such would
have
an
impact
even
after
Toyal
demonstrated
compliance
with
the
capture
and
efficiency
requirements
of the
Subpart
TT rules.
The
completely
unsupported
conclusion
that
Toyal’s
emissions
caused
great
harm
to
the
environment
is an
insufficient
basis
upon
which
to base
a
substantial
penalty
demand.
Moreover,
this case
differs
markedly
from People
v.
Panhandle
PCB
99-191,
Slip.
Op.
*21
(November
15,
2001),
where
the
respondent
was
in
violation
of
NOx
rules
for
over
ten
years,
and continued
to be
in violation
as
of the
time
when
the
Board
provided
its
decision.
While
Toyal
admittedly
was
in violation
of
the
Subpart
TT
rules
for a
period
of time,
it
did
operate
a
control
device
since
1998,
has
since 2003
demonstrated
full compliance,
and
has
had
continual
compliance
with
the
applicable
regulations.
5.
Toyal’s
Business
Has
a Positive
Social
and
Economic
Value
Toyal’s
facility
employed
89
employees
as
of
the time
of the
hearing
(48
hourly
union
and
41 salary)
(Tr.,
12/10/08,
p.
139:21-140:3).
Therefore,
Toyal
has
a positive
social
and/or
economic
value.
Further,
while
it is
true that
the
Board
has
found
that
a pollution
source
typically
possesses
a
“social
and economic
valu&’
that
is
to
be
weighed
against
its
actual
or
potential
environmental
impact,
in
this
case,
Toyal’s
operations
would
still
be considered
a
positive
social
and
economic
value.
People
v. Waste
Hauling
LandJIll
PCB 95-9
1 Slip.
0
p.
at
*21
(May
21,
1998).
Moreover,
in
these
trying
economic
times,
it is important
that
companies
remain
viable
and,
imposing
penalties
such
as
requested
by
Complainant
for
the
type
of
infraction
in
this
case,
(especially
one that
has
long
since been
cured)
should
not
be
a reason
for
jeopardizing
a company’s
continuing
viability.
- 33 -
Complainant
cites
to
Waste
Hauling
Landfill
in support
of
its
assertions;
however,
this
case
clearly
is
distinguishable
on
several
grounds.
First,
unlike
the
respondent
in
Waste
Hauling
Landfill who
consistently
failed
to
make
the
technical
improvements
necessary
to control the
overheight,
overfill,
and
hazardous
waste
disposal,
and
further,
did not
submit
proper
closure,
post-closure
plans,
or
meet
financial
assurance
obligations,
Toyal
continuously
strove
to
remedy
its noncompliance
issues
by
working
with
its
team
of
consultants
and
implementing
their
recommendations.
Second, the
Board
stated
in Waste
Hauling Landfill
that
“the
overheight
and
overfill
continue
to
be
problems
today
and
this
diminishes
the
social
and
economic
value
of
the
landfill.” Id. at
*21.
Here,
neither
the
Complainant
nor
the
record
before
the
Board
show
that
Toyal’s
noncompliance
continued
to be
a problem
after
April
2003,
let
alone
continuing
to
today
On
the
contrary,
Toyal
has
been
in
compliance
for
years.
Consequently,
the
Board
should
weigh
this
factor
in favor
of
Toyal.
6.
Toyal’s Facility
is
Suitable
to
the
Area
in
Which
it
is Located
Toyal’s
facility
is
suitable
for
the
area
where
it
is located
and
Complainant
has
not
substantiated
its
claim otherwise.
This
factor
requires
that
the
Board
look
at
the
location
of
the
source
and
determine
its suitability
to the
area,
including
the
question
of priority of
location.
Waste
Hauling
Landfihl
at
*
21.
In
an
exceptionally-strained
argument,
Complainant
contends
that
Toyal’s
facility
is
not
suitable
for
the
area,
simply
because
it
was
not
in
compliance
with
applicable
air
regulations
for
a
period
of
time.
(Complainant’s
Brief,
at
10-11).
Simply
being
out
of
compliance,
however,
does
not
somehow render
a
facility
“unsuitable”
for
its location
as contemplated
by the
Section
33(c)
faàtors.
Complainant
either
misunderstands,
or deliberately
misapplies,
the
point
of
this
test,
considering
that
in
practically any
enforcement
action,
a
facility
likely
is
(or
has
been)
out
of
compliance,
and
Complaint’s
interpretation
of this
factor
would
essentially
render
it
a nullity,
as
- 34
-
a
facility
would
always
be unsuitable
for
its
location
when
noncompliant,
under
Complainant’s
argument.
Complainant’s
position,
therefore,
is
illogical
and
simply
invalid.
The
Toyal
facility
is
located
in
the
Des
Plaines
Valley
Area.
(Tr.,
12/10/08,
p.
229:9-1
1).
The
Toyal
facility
was originally
used
a
long
time
ago
as
a
manufactured
gas
plant.
(Tr.,
12/10/08,
p.
230:2-6).
To the
east
of
the
Toyal
facility
is
the
Des
Plaines
River.
To
the
north
is
property
owned
by
the
Water
Reclamation
District
of
Greater
Chicago
and
a
wetlands
area.
To
the
west
is
an
Illinois
Department
of
Transportation
facility
and
Stateville
Penitentiary
property.
Directly
to
the
south
is
a
publicly
owned
treatment
works
operated
by
the
Village
of
Crest
Hill.
(Tr.,
12/10/08,
p.
229:7-22).
Based
on
the
above,
the
Toyal
facility
is
suitable
to
its
location.
Therefore,
the Board
should
weigh
this factor
in
favor
of
Toyal.
7.
Complainant’s
Argument
That
Compliance
Was
Technically
Practicable
and Economically
Reasonable
is
Flawed
While
Complainant
insists
that
compliance
was
technically
practicable
and
economically
reasonable,
its
argument
is
clearly
flawed.
(Complainant’s
Brief,
at
11).
While
the
‘technology’
may
have
been
available,
and even
in
place
at
a
certain
point,
the
successful
application
of
that
technology
to
the
Toyal
facility
was
anything
but
standard.
In
fact,
most
of
the
work
done
at
the
facility
to
show
compliance
with the
Subpart
TT
rules
had
to
be
custom
designed
and
fitted
for
the
facility.
As
testified
to
by
Mr. Dennis
Debrodt
at
the
hearing:
Q:
You
responded
that
fume
hoods
and
vacuum
systems,
obviously,
were
available
in
the
1990s.
Would
a
standard
fume
hood
qualify,
in
your
opinion,
as
a
permanent
total
enclosure?
A:
Well,
every
--
you
know,
all
the
source
points,
each
one
had
to
be
looked
at
individually
and
to
ensure
that
we
could
pass
that
criteria.
So,
you
know
there
are
all
kinds
of
standards
hoods,
but they
all
had
to
be
custom
fit
to
the
specific
equipment
they’re
connected
to.
So
it’s
not
as
-35
-
simple
as a standard
hood
for the
criteria.
They
kind
of all
had
to
be done
together.
Q:
You
didn’t
hear
it
yesterday,
Mr.
Malmgren
testified
about
the
modifications
that
were
necessary
on
the
screener
hoods
and
qualified
those
as
a
permanent
total
enclosure.
You’re
familiar
with
those?
A:
That’s
correct.
Q:
Would
you
call
those
a standard
fume
hood
as
the
way they
presently
exist?
A:
No.
Those
are
actually
very
specially
designed
for
that
piece
of
equipment
because
the
—because
there’s
a lot
of the
space
constraints
and
there’s
process
piping
going
through
the middle
of the
hood
to
get
the
product
to
the
screener.
So,
those
are
very
custom
designed.
(Tr.,
12/11/08,
p.
59:13-60:14).
Moreover, Complainant
fails
to
recognize
that
the
application
of the
available
technology
to
the Toyal
facility
presented
many
challenges
in
light
of certain
unique
factors
pertinent
to its
operations.
Consequently,
prior
to
even
completing
the
design
and
construction
there
was
a
significant
amount
of due
diligence
that
had
to be
completed
regarding
its large
number
of
small
emission
sources.
Unlike
in
Panhandle,
where
the
Board
noted
that
the
respondent
could
have
easily
verified
its compliance status
because
all
it needed
to calculate
such
was
its own
records
along
with
the
standard
emission
factor
(both
of
which
were
readily
available),
Toyal
did
not
have
the
necessary
information
readily
available.
People
v. Panhandle,
at
*21.
In
fact,
that
is one
of
the
main
reasons
for
the delay
in
compliance.
Hearing
testimony
clearly
established
that
Toyal’
s prospective
compliance with
Subpart
TT
required
that
it
use
emission factors
to
determine
what
the
fugitive
emissions
were
from
its
sources
that
were
not
feasible
to
be enclosed
or
captured.
(Tr.,
12/11/08,
p.
8
1:5-8).
Unlike
the
respondent
in
Panhandle,
Toyal
had
to develop
its
own emission
factors
because
there
was
no
-36-
such
thing
available
from
U.S. EPA
or
other
published
source.
(Tr.,
12/11/08,
p.
8
1:17-19).
This
was
one
of
the
unique
features
of
the facility
according
to
Steve
Anderson,
who
testified
that
such
was
“part
of
the uniqueness
of
this
plant.
I’ve
never
had
to
do
this
with
another
plant.
We
had
to
up
front
get
okays
from the
Agency
on
the
concept.
They
had
not, as
far
as
I
know,
seen
this
from
other facilities.”
(Tr.,
12/11/08,
p.
81:9-13).
Again,
as
previously
stated,
it
is
important
to
understand
that
Toyal
was
the
only
facility
of
its
kind
in
Illinois
that
was
subject
to
the
Subpart
TT
rules.
Consequently,
Toyal
did
not
have
a
model
or
example
to
guide
its
compliance
activities.
Thus,
when
Toyal
had
to
develop
its
own
program,
it
required
a
lot
of
time
and
effort,
and
also
required
obtaining
the
approval
of
Illinois
EPA.
While
Complainant
asserts
that
“the
Board
should
take
note
that
when
Toyal
replaced
its
VOM
control
system
in
2005,
it
was
able
to
arrange
for
permitting,
construction,
and
operation
of
the
new
control
device
within
one
year,”
it
surprisingly
ignores
the
very reasons
yy
Toyal
could
do
so.
(Resp.
Br.,
p.
11).
After
all,
by
2005
Toyal
had
already
worked
with several
consultants
to
understand
its
operations,
the
Subpart
TT
rules,
and
it
had
gone
through
some
positive
and not
so
positive
experiences
in
attempting
to
comply
with
the
Subpart
TT
rules
which
resulted
in
many
learned
lessons.
Consequently,
by
the
time
Toyal
sought
to
replace
its
VOM
control
system
in
2005,
it
had
a
better
understanding
of
what
it
needed
to
accomplish,
what
it
would
take,
and
how
it
was
going
to
complete
such;
this
was
all
as
a
result
of
its
diligence
and
the
efforts
it
undertook
in
the
years
prior
to
2005.
Most
telling
is
that
Complainant
does
not
comprehend
that
the
replacement
of
the
RCO
with
the
CR0
did
not
require
any
change
to
the
large
number
of
sources,
PTE
and
capture
and
collection
system,
nor
any
of
the
other
extensive
work
it
undertook
to
demonstrate
compliance
-37-
with
the
capture
efficiency
requirements
of
Subpart
TT.
Complainant’s
attempt
to
equate
these
two
issues
is
fundamentally
flawed:
installation
of
a
control
device
was
one
piece
of
the
Subpart
TT
compliance
requirements,
but
the
more
difficult
component
was
demonstrating
compliance
with
the
capture
efficiency
component
to
the
Subpart
TT
rules.
(Tr.,
12/10/08,
p.
134:9-19).
Therefore,
the
more
appropriate
comparison
would
be
to
assess
the
time
period
it
initially
took
Toyal
to
install
its
RCO
in
1998
(less
than
a
year),
which
was
similar
to
the
time
it
took
Toyal
to
install
the
CR0
in
2005.
(Comp.
Exhibit
7,
pL3).
Consequently,
for
the
Complainant
to
suggest
that
“the
evidence
shows
that
it
was
both
technically
feasible
and
economically
reasonable
to
require
Toyal
to
implement
the
proper
control
equipment
at
its
facility
to
come
into
compliance
with
the
Act
upon
the
date
the
regulations
came
into
effect”
(Resp.
Br.,
p.
11)
is
nonsensical
because
it
compares
apples
to
oranges,
and
also
fails
to
consider
the
technical
challenges
that
Toyal
encountered.
Based
on
the
above,
Toyal
respectfully
requests
that
Board
weigh
this
factor
in
its
favor.
8.
Toyal
Has
Subsequently
Demonstrated
Compliance
for
Over
Five
Years
Toyal
has
been
compliant
with
the
Subpart
TT
rules
after
it
passed
the
stack
test
and
was
issued
its
FESOP
and
implemented
the
necessary
modifications
to
its
facility
to
ensure
continuous
compliance
with
the
Subpart
TT
rules.
In
Blue
Ridge,
the
Board
noted
that
the
Respondent
had
“implemented
measures
to
properly
contain,
remove,
and
dispose
of
all
regulated
asbestos-containing
waste
and
refuse.”
People
v.
Blue
Ridge,
PCB
02-115,
Slip.
Op.
*13
(October
7,
2004).
Thus,
the
Board
weighed
this
factor
against
assessing
a
civil
penalty.
Id.
Similarly,
Toyal
has
been
compliant
with
the
Subpart
TT
rules
for
well
over
five
years.
Furthermore,
Toyal
has
not
received
any
notice
of
violation
from
the
Illinois
EPA
in
the
almost
ten
years
since
it
first
received
the
NOV
in
June
1998.
(Tr.
5/10/08
p.,
173:
4-12).
-38-
Moreover,
Toyal
has
been
consistent
in
following
the
terms
of
its
FESOP
as
evidenced
by
its
request
to
the
Illinois
EPA
for
a
provisional
variance
as
a
result
of
a
fire
in
the
CR0
on
December
8,
2006:
(Tr.,
12/10/08,
p.
226:20-227:1).
Toyal
was
compliant
with
the
terms
of
the
provisional
variance
it
received
from
Illinois
EPA.
(Tr.,
12/10/08,
p.
227:6-1
1).
Finally,
Toyal
disagrees
with
Complainant’s
position
that
Toyal’s
efforts
to
implement
measures
to
reduce
VOM
emissions
should
not
be
deemed
a
mitigating
factor
if
compliance
is
achieved
only
after
enforcement
proceedings
are
initiated.
(Resp.
Br.,
p.12).
This
argument
is
premised
on
the
need
to
deter
future
violations
and,
therefore,
but
for
the
enforcement
proceedings,
compliance
would
not
have
been
achieved.
Here,
Toyal
took
its
compliance
obligations
very
seriously.
Further,
Toyal
began
working
towards
compliance
immediately
as
soon
as
it
learned
of
its
noncompliance,
which
was
years
prior
to
any
enforcement
proceedings.
It
is
undisputed
that
Toyal
submitted
a
compliance
schedule
in
its
Title
V
application,
which
occurred
four
years
prior
to
the
filing
of
this
complaint.
This
is
truly
a
case
unlike
many
other
enforcement
actions,
because
Toyal
was
diligent
but,
unfortunately,
a
combination
of
several
factors
(i.e.,
fires,
working
with
consultantswho
didn’t
understand
the
Subpart
TT
rules
as
they
applied
to
the
Toyal
facility,
implementation
of
measures
to
better
understand
how
facility
could
demonstrate
compliance
with
Subpart
TT,
creation
of
an
emission
standard,
one-by-one
analysis
of
200
emission
sources,
customization
of
hoods
amongst
other
activities)
resulted
in
Toyal’s
delayed
compliance.
Based
on
all
of
the
above,
the
Board
should
weigh
this
factor
in
favor
of
Toyal.
-
39
-
9.
The
Board
Must
Consider
the
Factors
in
Section
42(h)
to
Determine
An
Appropriate
Penalty.
In
addition
to
the
factors
addressed
above,
the
Board
must
consider
the
factors
listed
in
42(h).
8
The
Board
has
wide
discretion
under
42(h)
of
the
Act
to
consider
any
factor
in
aggravation
or
mitigation
of
the
penalty.
ESG
Watts,
Inc.
v.
Illinois
Pollution
Control
Board
282
Ill.
App.3d
43,5
1,
668
N.E.2d
1015,1020
(4th
Dist.
1996).
Tn
determining
the
amount
of
a
civil
penalty,
the
Board
is
authorized
under
the
Act
to
consider
a
number
of
matters
in
either
mitigation
or
aggravation
of
penalty,
including
those
specified
in
Section
42(h)
of
the
act
but not
limited
to
the
following
factors:
(1)
the
duration
and
gravity
of
the
violation;
(2)
the
presence
or
absence
of
due
diligence
on
the
part
of
the
respondent
in
attempting
to
comply
with
requirements
of
this
Act
and
regulations
thereunder
or
to
secure
relief
therefrom
as
provided
by
this
Act;
(3)
any
economic
benefits
accrued
by
the
respondent
because
of
delay
in
compliance
with
requirements,
in
which
case
the
economic
benefits
shall
be
determined
by
the
lowest
cost
alternative
for
achieving
compliance;
(4)
the amount
of
monetary
penalty
which
will
serve
to
deter
further
violations
by
the
respondent
and
to
otherwise
aid in
enhancing
voluntary
compliance
with
this
Act
by
the
respondent
and
other
persons
similarly
subject
to
the
Act;
(5)
the
number,
proximity
in
time,
and
gravity
of
previously
adjudicated
violations
of
this
Act
by
the
respondent;
(6)
whether
the
respondent
voluntarily
self-disclosed,
in
accordance
with
subsection
(i)
of
this
Section,
the
non-compliance
to
the
Agency;
and
(7)
whether
the
respondent
has
agreed
to
undertake
a
supplemental
environmental
project,’
which
means
an
environmentally
beneficial
project
that
a
respondent
agrees
to
undertake
in
settlement
of
an
8
The
amendments
direct
the
Board
to
use
the
economic
benefit
from
delayed
compliance
as
the
minimum
penalty
amount.
-40-
enforcement
action
brought
under
this
Act,
but
which
the
respondent
is
not
otherwise
legally
required
to
perform.
415
ILCS
5/42(h)(2007).
a.
Duration
and
Gravity
As
provided
in
the
analysis
of
Section
33(c)
factors,
the
duration
of
Toyal’s
noncompliance
was
not
due
to
disregard
for
rules,
but
rather
because
of
the
challenges
that
it
faced
in
demonstrating
compliance.
Moreover,
Toyal
operated
a
control
device
from
December
1998
to
the
present.
(Tr.,
12/10/08,
p.29:14-22).
Thus,
the
gravity
of
its
actions
were
mitigated
by
its
continuous
operation
of
a
VOM
control
device.
Further,
this
case
is
distinguishable
from
Panhandle,
where
the
respondent
operated
a
source
that
had
undergone
a
major
modification
without
the
necessary
PSD
permit
and
control
technology
which
resulted
in
exceeding
its
461.3
ton
per
year
NOx
permit
condition
for
at
least
ten
years
and
it
emitted
an
unauthorized
33441.67
tons
of
NOx
into
the
air
from
1989
through
1998.
People
v.
Panhandle,
at
*21.
b.
Lack
of
Due
Diligence
Complainant’s
assertions
and
mischaracterizations
of
the
evidence
are
blatantly
inconsistent
with
all
the
facts
before
the
Board
and,
further,
shows
that
Complainant
does
not
understand
that
Toyal’s
unique
operations
simply
did
not
allow
for
a
cookie
cutter
approach
to
achieving
compliance.
Toyal
was
as
diligent
as
it
could
be,
given
the
circumstances,
and
spent
years
and
appreciable
sums
of
money
in
pursuing
compliance
(which
it
eventually
achieved).
Furthermore,
it
was
responsible
and
diligent
with
respect
to
assuring
that
the
inherent
dangers
of
its
business
were
minimized
during
this
time
period.
Throughout
the
noncompliance
period,
Toyal
was
active
in
its
efforts
in
trying
to
understand
its
operations
and
once
it
understood
what
it
needed
to
do
to
demonstrate
compliance,
it
did
so.
Consequently,
this
case
differs
from
enforcement
actions
where
the
alleged
violator
failed
to
perform
any
work
during
the
-41
-
noncompliance
period
to
correct
the
allegations
of
noncompliance.
See
People
v.
State
Oil,
Slip
Op.
*16
(March
20,
2003).
This
case
also
differs
from
other
enforcement
actions
where
the
respondent
relied
solely
on
Illinois
EPA
inspections
and
permit
renewals
to
determine
its
compliance
with
the
limitation
in
its
permit.
See
People
v.
Panhandle,
PCB
99-2001,
Slip
Op.
*21
(November
15,
2001).
Here,
Toyal
disclosed
its
noncompliance
as
a
result
of
its
own
investigations.
Furthermore,
Toyal
immediately
hired
consultants
and
submitted
a
compliance
plan
and
schedule
when
it
disclosed
its
noncompliance.
(Tr.,
12/10/08
p.,
158:20-159:5).
Moreover,
it
immediately
acted
in
accordance
with
its
compliance
plan
and
schedule
as
it
sought
bids
to
complete
the
necessary
work.
(See
Resp.
Exhibit
3
for
implementation
schedule)
(Tr.,
12/10/08,
p.
160).
Complainant
makes
unfounded
assertions
regarding
Toyal’s
decisions
but,
yet,
it
did
not
present
any
witnesses
or
other
evidence
to
contradict
that
Toyal’s
delay
in
compliance
was
not
based
on
legitimate
grounds.
Therefore,
the
Board
should
weigh
this
factor
in
favor
of
Toyal.
c.
Economic
Benefit
Because
economic
benefit
is
at
the
center
of
this
litigation,
it
is
discussed
further
below
in
its
own
section.
d..
Deterrence
of
Further
Violations
and
Aid
in
Enhancing
Voluntary
Compliance
with
the
Act
This
case
differs
from
Panhandle,
where
the
Board
found
that
a
substantial
penalty
was
needed
in
order
to
deter
future
violations
and
enhance
voluntary
compliance
by
the
Respondent
and
other
similarly
situated
entities.
People
v.
Panhandle,
PCB
99-191,
Slip.
Op.
*21
(November
15,
2001).
Specifically,
the
Board
noted
that
the
penalty
amount
would
serve
to
ensure
that
the
respondent
and
other
companies
like
it
actually
review
the
permits
they
accept,
and
take
the
steps
necessary
to
monitor
their
compliance,
such
as
having
basic
communications
-42-
among
employees
responsible
for
emissions
and
those
familiar
with
permit
limits.
Id. The
Board
further
noted
that
the
respondent
made
no
effort
to
determine
its
compliance
status before
the
Agency
discovered
its
excess
emissions.
Id.
at
*21.
Moreover,
in
Panhandle
the
respondent
accepted
a
permit
that
it
could
not
live
with,
which
allowed
it to
avoid
the
compliance
costs.
Id.
at
*26.
Further,
the respondent’s
compliance
efforts
appeared
to
have
been
a
result
of
the
“looming
of
enforcement.”
Id.
Finally,
even
at
the
time
of
the
hearing,
the
respondent
continued
to
operate
a
major
modification
without
the
necessary
PSD permit.
Id.
at
*21.
In
contrast,
in
the
present
matter,
Toyal
disclosed
its
noncompliance
to
the
Illinois
EPA
when
it
submitted
its
CAAPP
application
along
with
an
action
plan
and
schedule
of
compliance.
Moreover,
Toyal
expended
a
significant
amount
of
money
in
determining
how best
to
come
into
compliance.
The
record
is
replete
with
examples
of
all
the
many
steps Toyal
took
in
pursuit
of
compliance,
from
when
it
first learned
of
its
noncompliance
to
when
it
actually
demonstrated
compliance
in
2003.
Further,
more
than
five
years
have
passed
and Toyal
has
not
been
in
violation
of
Subpart
TT
or
its
permit
terms.
Consequently,
deterrence
is
not
now
an
issue.
Deterrence
of
similarly
situated
entities
is
a
non-issue,
as
none
of
Toyal’
s
competitors
were
required
to
have
VOM
controls.
While
it
may
have
taken
Toyal
a
long
time
to
come
into
compliance,
such
was
due
to
the
amount
of
work it
completed
to
understand
how
it
best
could
come
into compliance
with
Subpart
TT
rules,
and
not
because
its
lack
of
diligence.
Toyal
was
diligently,
and in
good
faith,
trying
to
come
into
compliance
throughout
the
entire
noncompliance
period,
as
evidenced
by
its
actions
in
hiring
competent
environmental
consultants
and
implementing
their
recommendations.
Moreover,
this extended
period
of
time
allowed
Toyal
to
understand
what
its
emissions
were
and
what control
device
and!or
operations
would
work
the
best
with
its
facility
while
-43-
ensuring
future
compliance
with
Subpart
TT,
and ensuring
the
safety
of
its
facility
and
employees
given
the
inherent
dangers
of
its
operations.
In
fact,
Toyal
opted
for
a
FESOP
rather
than
a
CAAPP
permit,
thereby
further
reducing
its
emissions
and
doing
more
than
what
was
required.
9
Furthermore,
Toyal’s
efforts
to
come
into
compliance
were
not
as
a
result
of
the
enforcement
actions
by
Illinois
EPA,
unlike
in
Panhandle,
where
the
Board
found
significant
that
Panhandle
only undertook
compliance
efforts
when
faced
with
looming
enforcement.
Id.
at
*24.
The
model
behavior
shown
by Toyal
in
terms
of
its
due
diligence
and
good
faith
efforts
should
be
encouraged
rather
than
discouraged.
Moreover,
Complainant’s
arguments
that
Toyal
continued
violating
the
Act for
eight
years
while
it
spent
money
on
other
capital
projects
that
allowed
its
facility
to
increase
its
profit
while
exceeding
VOM
emissions,
completely
misconstrues
the
facts
presented
before
the
Boari
Toyal
does
not
deny
that
it
embarked
on
certain
capital
projects.
For example,
the
modification
to
the
paste
B
Unit
was
performed
to
replace
the
older
mills
with
newer
mills,
and
this
resulted
in
only
a
small
amount
of
capacity
increase
(Tr.,
12/10/08,
p.
118:17-1).
More
importantly,
this
project
was
necessary
to
allow
Toyal
to
be
able
to
install
enclosures
and
capture
emissions
to
demonstrate
compliance
and,
for
that
reason,
Illinois
EPA
included
this
project
when
it
issued
Toyal’s
May
2001 construction
permit.
(Resp.
Exhibit
17).
Finally,
the
other
capital
projects
that
Toyal
completed
during
its
noncompliance
period
included
the
investment
of
a
fire
suppression
systems
and
alarm
systems
for the
plant.
(Tr.,
12/10/08,
p.153:3-8).
Nowhere
does
Complainant
provide
a
basis
for
the
implication
that
Curiously,
Complainant
actually
criticizes
Toyal
for
switching
gears
from
its
initial
CAAPP
permit
application
to
a
FESOP,
and
characterizes
that
as
unnecessary
and
wasted
effort.
Complainant
overlooks
the
fact
that
applying
for
a
FESOP
actually
required
Toyal
to
demonstrate
and
achieve
emissions
of
less
than
25
tons
per
year,
which
is
better
for
the-environment
and
was
anything
but
a
wasted
effort.
-
44-
Toyal’s
noncompliance
was
due
to
a
scarcity
of
funds
devoted
to
Toyal’s
compliance
efforts.
The
record
reflects
Toyal’s
documented
expenditures
of
over
a
million
dollars
for
just
one
piece
of
emission
control
equipment
(the
vacuum
chiller)
after
already
installing
the
RCO.
Additionally,
Toyal
also
replaced
its
already
the
permitted
and
operating
RCO
with
a
CR0
in
2005,
which
improved
its
emissions
control
and
avoided
the
problematic
shutdowns
it
experienced
with
the
RCO.
Thus,
any
suggestion
by
Complainant
that
Toyal’s
compliance
program
was
starved
for
ftinds
is
unsupported
and
simply
wrong.
Based
on
all
of
the
facts
as
presented
in
the
record
before
the
Board,
the
Board
should
weigh
this
factor
in
favor
of
Toyal.
e.
Previously
Adjudicated
Violations
Here,
Complainant
has
not
presented
any
evidence
of
previously
adjudicated
violations.
However,
it
should
be
noted
that
the
complaint
filed
in
this
matter
alleged
five
claims
under
the
Resource
Conservation
and
Recovery
Act
(“RCRA”)
and
two
claims
under
the
Clean
Air
Act
(“CAA”).
However,
Complainant
and
Toyal
entered
into
a
partial
settlement
agreement
on
June
21,
2001,
resolving
all
of
the
RCRA
claims.
Pursuant
to
the
partial
settlement
agreement,
Toyal
paid
a
penalty
in
the
amount
of
$31,500.
Consequently,
this
factor
could
only
serve
to
mitigate
any
penalty
imposed
on
Toyal.
See
People
v.
State
Oil
PCB
97-103
at
*14
(Slip.
Op. March
20,
2003).
45
-
f.
Self-Disclosure
Toyal
disclosed
its
noncompliance
at
the
time
of when
it submitted
its
CAAPP
application.
However,
Toyal
believes
that
this
factor
neither
weigh
in mitigation
or
aggravation
of
a
penalty.
g.
Supplemental
Environmental
Project
or
Beneficial
Economic
Project
While
not
formally
proposed
to
or
accepted
by
Illinois
EPA
as
a
supplemental
environmental
project
(“SEP”)
under
Section
42(h)(7)
of
the
Act, Toyal
respectfully
requests
that
the
Board
consider
the
$674,000
it
expended
to replace
its
RCO
control
device
with
a
CR0
as
a
factor
in
mitigation
of any
penalty
that
may
be
imposed
by
the
Board.
In
2005,
Toyal
replaced
its
RCO
with
a
CR0
to
more
efficiently
control
its
VOM
emissions.
(Tr.,
12/10/08
p.1
11:12-20).
Toyal
‘S RCO
operations
were
compliant
with
the
Subpart
TT
rules
and
the
FESOP
issued
by
the Illinois
EPA.
However,
the
RCO
suffered
outages
from
high
temperatures.
(Tr.,
12/10/08,
p.
112:17-19).
These
outages
did
not
result
in
any
noncompliance
because
Toyal’s
FESOP
permit
included
a
provision
allowing
for
the
outages.
(Tr.,
12/10/08
p.1
11:12-20
and
Resp.
Exhibit
18).
However,
the
outages
were
disruptive
and,
with
each
outage,
Toyal
had
to
follow
the
required
notification
to
Illinois
EPA
and
recordkeeping
provisions
under
its FESOP.
(Tr.,
12/10/08,
p.
112:17-19).
As
testified
at
the
hearing,
once
Toyal
replaced
its RCO
with
the
CR0
the
subsequent
stack
test
showed
increased
destruction
and
efficiency,
and
this
resulted
in
less
controlled
VOM
emissions
and
less
uncontrolled
emissions
due to
the
elimination
of
the
periodic
RCO
high
temperature-induced
shutdowns.
(Tr.,
12/10/08,
p.
112:9-11).
Toyal
was
under
no legal
obligation
to
make
this
significant
expenditure
to replace
the
RCO.
-46
-
As
a
result,
this
project
has
been
very
beneficial
for
the environment
in
that
the
controlled
emissions
have
been
reduced
from
20
tpy
of
VOM
to
about
12 tpy.
If the
Board
considers
this
project
as
a
factor
in
mitigation
of
any
penalty
that it
may
impose,
it will
serve
as
an
incentive
and
encourage
the
regulated
community
to
do more
than
what
is
required
under
the
respective
environmental
regulations.
More
importantly,
this
serves
to better
the
environment
for
the
people
of
the
State
of
Illinois.
Based
on the
above,
Toyal
respectfully
requests
that
Board
consider
this
as
a factor
in mitigation
of any
penalty
to be
assessed
by
the Board.
C.
TOYAL’S
NONCOMPLIANCE
DID
NOT
RESULT
IN
AN
ECONOMIC
BENEFIT,
BUT
RATHER
A
NEGATIVE
COST
Toyal
did
not enjoy
an
economic
benefit
because
of
its
noncompliance;
rather,
it
experienced
a negative
cost as
a result
of its
expenditures
for
a vacuum
chiller
unit and
its
inability
to
use its
current
solvent
recovery
system.
Section
42(h)
of the
Act
was
substantially
amended
by
P.A.
93-575,
effective
January
1,
2004.
These
amendments
became
effective
after
Toyal
had
already
demonstrated
compliance
in 2003.
The amendments
established
that
a
violator’s
economic
benefit
from
delayed
compliance
is
to
be
the minimum
penalty
amount.
See People
v.
Blue Ridge
Construction
Group,
fn.
1.
Section
42(h)(3)
now
reads,
“any
economic
benefits
accrued
by the
respondent
because
of
delay
in compliance
with requirements,
in
which
case
the
economic
benefits
shall
be
determined
by
the
lowest
cost
alternative
for achieving
compliance.”
415
ILCS 5142(h)(3)(2007).
Unfortunately,
neither
the
Act
nor
any
Illinois
EPA
guidance
provides
any further
instruction
or
guidance
to
determine
how
to
calculate
economic
benefit.
However,
U.S.
EPA
does
provide
guidance
in
determining
how
to
calculate
economic
benefit,
and
included
in its
guidance
is
the
ability
to
offset certain
expenditures
from
economic
benefit.
-47
-
At the
hearing,
Toyal
presented
its
expert
witness,
Mr.
Christopher
McClure
of
Navigant
Consulting,
who
conducted
an independent
economic
benefit
analysis.
Mr.
McClure
is
a
Certified
Public
Accountant,
Certified
Fraud
Examiner,
and
is Certified
in
Financial
Forensics.
(Resp.
Exhibit
22(a)).
Complainant
presented
Mr.
Gary Styzen
of Illinois
EPA
as its
economic
benefit
analyst
expert.
Based
on
Mr.
McClure’s
analysis,
the
parties
derived
a
very
similar
calculation
regarding
delayed
and
avoided
expenditures.
(Tr.,
12/10/08,
p.
93:3-5).
However,
consistent
with
U.S. EPA
guidance,
Mr. McClure’s
delayed
and avoided
costs
analysis
took
into
account
the
expenditure
of
the
$1
million
Toyal
spent
in purchasing
the
vacuum
chiller
unit.
As
Toyal
proceeded
with
its
compliance
activities,
it
realized
that it
would
not
need to
use
the
vacuum
chiller
unit to
come
into compliance
with
the
Subpart
TT rules.
Unfortunately,
however,
it had
already
expended
the
$1.1
million,
which
it
had done
in
good
faith,
based
upon
the
recommendations
of
its consultant.
Additionally,
during
the
noncompliance
period,
Toyal
was
unable
to enjoy
the
benefits
of using
its
upgraded
solvent
recovery
system
and,
thus,
forego
a
benefit
of
$1,096,631.
Consequently,
as a
result,
Toyal
did
not enjoy
an
economic
benefit
but,
rather,
a
negative
cost
during
the
noncompliance
period,
which
should
be
factored
into
the
economic
benefit
analysis
in this
matter.
1.
The
Board
Should
Accept
Mr. McClure’s
Economic
Benefit
Analysis
because
it
Appropriately
Captures
Toyal’s
True
Cost
of
Noncompliance
Mr. McClure’s
economic
benefit
analysis
is
appropriate
because
it captures
Toyal’s
true
cost
of noncompliance.
Specifically,
Mr.
McClure
derived
its
analysis
using
the
various
components
provided
in
the
US.
EPA
BEN
User’s
Manual,
U.S.
EPA
Office
of
Regulatory
Enforcement
and
Compliance
Assurance
(September
1999).
(Tr.,
12/11/08,
p.133:l0-18)(see
also
Resp.
Exhibit
22(a)).
The
first
of
those
components
was
an analysis
of
Toyal’s
benefit
from
- 48
-
delaying
capital
expenditures.
(Tr.,
12/11/08,
p.133:23-134:9).
The
purpose
of
calculating
delayed
capital
expenditures
is
that
when
a
company
is
supposed
to
reach
compliance
by
a
certain
date
but
doesn’t,
it
avoids
or
delays
those
capital
expenditures,
thereby
holding
onto
its
funds
for
a
period
of
time.
(Tr.,
12/11/08,
p.
1
34:1-9).
Thus,
the
company
enjoys
an
economic
benefit
in
retaining
those
funds
for
that
period.
Id.
The
second
component
to
Mr.
McClure’s
analysis
consisted
of
the
avoided
costs
which
includes
the
monthly
costs
associated
with
operating
the
system
that
they
would
have
otherwise
operated
had
they
been
in
compliance
and,
thus,
are
completely
avoided
because
they
never
incurred
those
monthly
charges.
(Tr.,
12/11/08,
p.134:1-9).
In
order
for
Mr.
McClure
to
complete
an
accurate
analysis,
it
obtained
from
Toyal
the
capital
expenditures
information
and
the
delayed
costs.
(Tr.,
12/11/08,
p.134:1-9).
Toyal
provided
substantial
back
up
information,
invoices,
and
accounts
payable
information
to
support
all
of
its
expenditures.
Based
on
Mr.
McClure’
s
experience
and
professional
certifications,
all
of
the
information
provided
by
Toyal
appeared
to
be
true
and
accurate.
(Tr.,
12/11/08,
p.199:12-16).
Mr.
McClure
concluded
that
the
delayed
capital
expenditures
were
$153,986.
Further,
Mr.
McClure
concluded
that
Toyal’s
avoided
recurring
costs
were
$138,385.
However,
consistent
with
the
U.S.
EPA
BEN
User’s
Manual,
Mr.
McClure
modified
the
above
costs
to
include
the
foregone
benefits
related
to
Toyal’s
solvent
recovery
and
the
expense
of
the
vacuum
chiller
unit.
2.
U.S.
EPA’s
BEN
Manual
Provides
Guidance
on
How
to
Calculate
Economic
Benefit
and
Allows
for
Legitimate
Offsets
U.S.
EPA’s
BEN
User’s
Manual
sets
forth
a
methodology
for
calculating
the
economic
benefits
gained
from
delaying
and
avoiding
required
pollution
control
expenditures.
(Resp.
Exhibit
22(a)-
Ben
User
Manual
p.
1
-2).
It
uses
standard
financial
cash
flow
and
net
present
-
49
-
value
techniques
based
on
modem
and
generally
accepted
financial
principles.
Id.
at
1-3. Thus,
it
serves
as
guidance
to
a
practitioner
as
to
how
to
calculate
an
economic
benefit
penalty.
(Tr.,
12/11/08,
p.
130:19-22).
Mr.
McClure
relied
on
the
BEN
Manual
to
calculate
Toyal’s
economic
benefit
as
provided
above.
Mr.
McClure’s
reliance
on
this
manual
is
appropriate
given
that
neither
the
Act
nor
Illinois
EPA
have
any
other
guidance
regarding
how
to
calculate
economic
benefit.
Moreover,
even
Mr.
Styzen testified
that
the
BEN
manual
is
used
by
the
Illinois
EPA
and
the
Attorney
General’s
Office.
(Tr.,
12/10/08,
p.
67:10-68:2).
In
fact,
the
documents
relied
upon
by
Mr.
Styzen all
point
to
and
provide
additional
discussion
of
the
U.S.
EPA
BEN
User’s
Manual.
(See
Tr.,
12/11/08,
p.137:23-138:16).
Moreover,
Complainant
has
presented
no
evidence
that
contradicts
the
substance
of
the
BEN
User’s
Manual.
Finally,
even
the
U.S. EPA
has
stated
that
“the
BEN
is
by
far
the
best
approach
available
for
calculating
economic
benefit
derived
from
delayed
and
avoided
costs.”
U.S.
EPA,
Calculation
of
the
Economic
Benefit
of
Noncompliance
in
EPA
‘s
Civil
Penalty
Enforcement
Cases,
64
FR
117
32948,
32949
(June
18,
1999)
(See
Resp.
Exhibit 22(a)(Blank
Tab
after
BEN
User
Manual)).
The
BEN
User’s
Manual
provides
specific
examples
of
certain
compliance
scenarios
that
are
relevant
in
the
matter
at
hand.
Specifically,
Page 4-3
of
the
BEN
User
Model provides
that
if
a
violator
spends
money
on
a
system
that
does
not
work,
it
may
offset
the
economic
benefit
by
the
after-tax
present
value
of the
unsuccessful
expenditure.
However,
this
offset
assumes
that
the
violator
went
to
a
reputable
firm,
the
firm
recommended
the
system
that
failed,
and
the
violator’s
reliance
on
the
recommendation
was
reasonable.
In
addition,
page
4-6
the
BEN
User’s
Manual
also
provides
that,
in
some
instances
compliance
is
“cheaper”
than
noncompliance
because
the
violator
comes
into
compliance
late
-50-
and
finds
that
it
has
been
saving
money
since
it
installed
the
new
technology.
Specifically,
it
states
that
this
situation
may
occur
because
the
compliant
technology
allows
the
violator
to
recover
materials
and/or
reduce
operation
and
maintenance
costs.
Thus,
BEN
produces
a
negative
result.
In
addition,
the
BEN
notes
that
perhaps
the
violator
was
unaware
of
the
potential
cost
savings
from
compliance.
3.
Mr.
McClure’s
Economic
Benefit
Analysis
Appropriately
Accounted
for
Toyal’s
Expense
of
the
Vacuum
Chiller
Unit
Mr.
McClure’s
economic
benefit
analysis
correctly
included
the
expense
Toyal
incurred
for
the
vacuum
chiller
unit
at
the
recommendation
of
Chemstress
Engineering.
As
cited
above,
an
appropriate
economic
benefit
analysis
should
include
the
amount
of
money
that
Toyal
invested
in
the
centralized
vacuum
chiller
system.
Here,
the
record
before
the
Board
shows
that
Toyal
purchased
the
vacuum
chiller
unit
for
approximately
$1 million
at
the
recommendation
of
its
consultant,
Chemstress
Engineering.
(Tr.,
12/10/08,
p.
166:24-167:2).
The
investment
of
the
vacuum
chiller
unit
was
for
compliance
purposes.
Specifically,
it
was
Toyal’s
understanding
that
the
vacuum
chiller
system
was
needed
to
replace
the
numerous
vacuum
pumps
throughout
the
plant
(these
are
all
emission
sources
identified
through
the
permit
process)
with
a
centralized
vacuum
and
condenser
system
that
would
act
as
a
control
device
to
aid
in
controlling
some
fugitive
emission
point.
(Tr.,
12/10/08,
p.214:3-13).
As explained
by
Mr.
McClure
at
the
hearing,
it
is
appropriate
for
the
Board
to
consider
this
expense
if
it
is
to
capture
the true
cost
of
its
noncompliance.
Q.
If
a
company
spends
money
on
a
capital
project,
be
it
pollution
control
or
a
pollution
control
capital
project,
whether
it
is
used
or
not
used,
does
the
company
have
that
money
available
thereafter,
for
other
investment
purposes?
A.
No.
Once
the
dollars
are
expended,
the
company
be
definition
loses
the
economic
value
of
retaining
those
-
51
-
funds.
And
this
type
of situation,
specifically
the
Toyal
situation
is
discussed
in
the
BEN
user
manual
presumably
because
the
EPA
sees
this.
(Tr.,
12/11/08,
p.
151:18-152:5).
Based
on the
above,
Mr.
McClure’s
analysis
appropriately
considered
the
expenditure
of
the
vacuum
chiller
unit
because
Toyal
lost
out
on
its
ability
to
use
the
$1
million
it
spent
on
this
system
on
reliance
of
its
consultant,
Chemstress,
for
other
projects
or
uses.
Further,
there
is
no
evidence
in
the
record
that
shows
that
Toyal’
s
reliance
was
unreasonable
or
that
Chemstress
was
not
a
reputable
company.
4.
Mr.
McClure’s
Economic
Benefit
Appropriately
Accounted
for
Solvent
Recovery
Mr. McClure
appropriately
considered
the
offset
for solvent
recovery
because,
had
Toyal
been
in
compliance,
it
could
have
realized
certain
operating
efficiencies
related
to
same.
The
BEN
User
Manual
specifically
provides
several
different
references
in
support
of
this
assertion.
First,
under
the
annual
recurring
cost
discussion
on
Page
3-11,
it
specifically
states
that
the
recurring
costs
may
be
negative
if
compliance
increases
efficiency.
Thus,
it
clearly
indicates
that
offsetting
credits
for
any
number
of
process
improvements
must
be
considered.
(Tr.,
12/11/08,
p.141:18-142:1).
Second,
as
provided
in
subsection
(a),
above,
Page
4-6
provides
a
very
specific
direction
to
the
practitioner
to
consider
said
fact
pattern
when
conducting
a
BEN
analysis.
Here,
when
Navigant
Consulting
was
conducting
its
BEN
analysis,
in
its
discussions
with
Toyal
it
discovered
that
the
compliant
system
had
the
specific
side
effect
or
the
specific
result
of
cost savings.
(Tr.,
.12/11/08,
p.142:2
i-i43:2).
Further,
the
compliant
system
allowed
the
company
to
recover
solvents
more
reliably,
and
that
improved
recovery
resulted
in
a
cost
savings
because
Toyal
is
does
not
need
to
purchase
as
much
solvent.
(Tr.,
12/11/08,
p.l
42
:
2
l-i
43
:
2
).
-
52
-
Moreover,
Navigant
requested
that
Toyal
provide
it
with
very
specific
data
regarding
the
recapture
and
the
pricing
of
the
solvents
to
confirm
if
the
above
was
correct.
(Tr.,
12/11/08,
p.143:10-19)’°.
Based
on
Navigant’s
review
of
the
data,
it.
was
very
clear
that
the
recapture
before
and
afier
the
installation
of
the
system
is
very
different.
(Tr.,
12/11/08,
p.143:20-22).
Navigant
concluded
that
Toyal
would
have
had
a
potential
cost
savings
of
more
than
a
million
dollars
had
they
had
the
system
in
place
at
the
compliance
date.
(Tr.,
12/11/08,
p.143:22-144:4).
Hence,
Navigant
coined
the
term
“foregone
benefit”
based
on
potential
cost
savings
that
it
would
have
otherwise
enjoyed.
Complainant’s
arguments
dismissing
Toyal’s
foregone
benefits
analysis
should
be
rejected.
First,
the
BEN
User’s
Manual
supports
consideration
of
such
issues
where
there
are
process
improvements
due
to
compliance.”
Second,
page
4-6
of
the
BEN
Manual
explains
that
the
violator
need
not
be
aware
of
the
potential
cost
savings
from
compliance
in
order
for
this
to
be
considered
as
a
mitigating
factor.
Third,
the
Complainant
incorrectly
argues
that
the
solvent
recovery
system
was
unrelated
to
the
compliance
at
the
Toyal
facility.
In
fact,
the
solvent
recovery
system
was
intrinsically
related
to
compliance.
As
testified
to
at
the
hearing
by
Mr.
Van
Hoose.
Q.
What
is
your
understanding
of
what
was
the
last
step
that
was
necessary
to
be
completed
by
Toyal
before
it
could
successfully
demonstrate
compliance
with
the
81
percent
overall
control?
‘°
All
of
the
supporting
data
provided
by
Toyal
regarding
the
foregone
benefits
associated
with
the
solvent
recovery
system
is
provided
in
Resp.
Exhibit
22(a)-
under
the
Foregone
Benefits
tab.
In
fact,
the
BEN
User
Manual
specifically
provides
that
this
situation
may
occur
because
the
compliant
technology
allows
the
violator
to
recover
materials
and/or
reduce
operation
and
maintenance
costs.
(Exhibit
22(a)-
BEN
User
Manual
Tab).
-
53
-
A.
The
last
step
prior
to
compliance
testing
was
to
be able
to
connect
the
tank
farm
into
the
RCO.
In
our
process,
from
our
filter
press
we
actually
remove
solvent
and
that
solvent
goes
out
to
the tank
farm,
which
is
outside.
That
needed
to
be
connected
—
and
Dennis
can
go
into
that
more
specifically
on
how
it
was
done
—
and
then
take
those
vapors
and
send
it
to
the
RCO.
Up
to
that
point,
it
was
not
connected.
And
as
a
last
step
beyond
that
we
connected
the
solvent
distillation
tank
into
that
same
pot
that
sends
it
out
to
the
RCO.
Q.
And
earlier
did
I
understand
that
it
was
at
that
point
in
time
that
you
were
able
to
use
air
stripping
to
remove
the
contaminants
—
A.
That’s
correct.
.Q.
--
from
that
solvent?
A.
That’s
correct.
Q.
Why
did
the
use
of
that
air
stripping
system
result
in
the
ability
for
Toyal
to
continue
to
reuse
that
solvent
many
more
times?
That’s
a
pretty
poor
question,
but
I
think
you
get
the
idea.
A.
Why
did it
work?
The
bubbling
of
the air
and
the
air
stripping
actually
allows
the
short
chain
acids
to
vaporize
off
removing
that
from
the
solvent.
Then
we
can
use
the
solvent
back
into
the
system
over
and
over
again.
(Tr.,
12/10/08,
p.
169:12-19).
As a
result
of
above
modifications
to
its
solvent
recovery
system,
Toyal
was
able to
enjoy
the
benefits
of
not
having
to
buy
solvent
at
the
initial
cost
once
it
had
completed
its
compliance
activities.
(Tr.,
12/10/08,
p.
172:1-8).
Based
on
the
above,
it
is
clear
that
Mr.
McClure
appropriately
considered
the
foregone
benefits
associated
with
the
solvent
recovery
system
and,
therefore,
was
able
to
more
accurately
determine
Toyal’
s
true
cost
of
noncompliance.
-54--
5.
Mr.
Styzen’s
Economic
Benefit
Analysis
is
Incomplete
Because
He
Fails
to
Capture
Toyal’s
True
Cost
of
Noncompliance
Notwithstanding
the
above
arguments,
Mr.
Styzen’s
calculations
of
Toyal’s
delayed
and
avoided
costs
were
very
comparable
to
those
calculated
by
Mr.
McClure.
However,
there
were
certain
minor
distinctions,
none
of
which
are
significant,
except
for
the
arguments
presented
below.
The
key
values
considered
by
Mr.
McClure
included:
•
The
capital
expense
for
the
control
device
in
the
amount
of
$1,252,017
•
Non-Compliance
Start
Date
of
March
15,
1995
•
Non-Compliance
End
Date
April
1,
2003
•
Plant
Cost
Index
for
Inflation
Rate
•
Tax
Rate
•
Discount
Rate
5%
Estimate
of
Risk-Free
Rate
Mr.
Styzen
generally
agreed
with
the
above
values
in
Mr.
McClure’s
delayed
and
avoided
cost
analysis.
However,
Complainant
argues
that
the
discount
rate
is
inappropriate.
a.
Mr.
McClure’s
Use
of
the
Discount
Rate
is
Appropriate
While
the
state
claims
that
the
risk-free
discount
rate
is
inappropriate,
it
is
important
to
note
that
Mr.
McClure’s
(5%)
is
actually
higher
than
the
one
used
by
Gary
Styzens
and
would
result
in
a
larger
penalty
(in
the
absence
of
the
solvent
offset).
The
discount
rates
used,
although
employed
based
on
different
theories,
are
so
close
as
to
make
any
difference
immaterial.
Mr.
McClure’s
inclusion
of
the
risk-free
rate
is
well
supported
in
both
case
law
and
relevant
economic
and
legal
literature.
See
US.
v.
WCI
Steel,
Inc.,
72
F.Supp.
2d
810,
830,
1999
U.S.
Dist.
Lexis
174376
*58
(ND.
Ohio
1999).
-
55
-
b.
Mr.
Styzen’s
Economic
Benefit
is
Inappropriate
and
It
Confuses
Economic
Benefit
Which
is
a
Purely
Financial
Analysis,
with
Punitive
Considerations
The
BEN
User’s
Manual
clearly
states
that
economic
benefit
is
“no
fault”
in
nature.
See
Page
1-2.
This
is
consistent
with
the
Act
as
it
requires
the
calculation
of
economic
benefit
first,
and
then
consideration
of
the other
factors
set
forth
in
Section
42(h)
in
mitigation
or
aggravation
of
a
penalty
to
be
imposed
upon
the
noncompliant
party.
It
is
clear,
based
on
the information
provided
above,
that
the
expenses
associated
with
the vacuum
chiller
unit
and
the
foregone
benefits
are
within
the parameter
of
considerations
that
can
be
used
in
determining
an
appropriate
economic
benefit
analysis
as
set
forth
in
the
BEN
User’s
Manual.
Mr.
Styzen
rejected
this
as a
legitimate
consideration,
but
did
not
reject
the
principles
or
substance
of
the
BEN
User’s
Manual
itself.
Rather,
Mr.
Styzen
argues
that
it
should
only
be used
by
Illinois
EPA
and
the
Attorney
General’s
Office
for
settlement
purposes
y.
Significantly,
Mr.
Styzen’s
expert
report
offers
no
authority
as to
why
the
BEN
model
should
or
should
not
be
applied,
simply
based
on
the
procedural
posture
of
a
case.
Mr.
Styzen’s
testimony
at
the
hearing
was
similarly
unsupported.
(See
Tr.,
12/10/08
p.
75:9-87:12).
Therefore,
his
rationale
for
rejecting
application
of
the
BEN
User’s
Manual
in
an enforcement
proceeding
makes
no
sense,
and
is
nothing
more
than
lpse
dixit
(i.e., “Because
I
said
so.”)
Because
Mr. Styzen’s
analysis
did
not
include
the
true
cOsts
of
Toyal’s
noncompliance,
its
analysis
is
flawed
and
incomplete.
Therefore,
the
Board
should
look
to
Mr.
McClure’s
analysis
to
determine
the true
cost
to
Toyal
of
its
noncompliance.
c.
If
Accepted
by
the
Board,
Mr.
Styzen’s
Analysis
Would
Negatively
Impact
Compliance
and
Good
Business
Practices
Mr.
Styzen’s
testimony
and economic
benefit
analysis,
if
accepted
by
the
Board,
would
have
a
chilling
effect
on
the willingness
of
regulated
entities
to
come
into
compliance.
-56-
Regulations
are
supposed
to
be
applied
in
a
consistent
manner.
Mr.
Styzen
has
cited
no
authority
as
to
why
an
agency
such
as
the
Illinois
EPA
or
the
Attorney
General’s
office
should
be
able
to
rely
on
the
BEN
model
for
settlement
purposes
and
not
for
in
under
other
circumstances.
Moreover,
the
U.S.
EPA
has
recognized
that
the
BEN
Model
as
was
discussed
above
and
it
has
opened
this
document
up
for
public
comment
so
as
to
continue
to
better
the
model.
64
FR
117,
32948
(June
18,
1999).
As
provided
in
the
BEN
User’s
Manual,
economic
benefit
is
“no
fault”
in
nature
and
is
purely
financial.
Throughout
his
testimony
at
the
hearing,
Mr.
Styzen
cites
to
a
U.S.
EPA
document
titled,
“Leveling
the
Playing
Field”
which
discussed
the
purposes
of
the
ecOnomic
benefit.
(See
Tr.,
12/10/08
p.
75:9-87:12).
Specifically,
the
document
states
that
penalties
serve
to
“level
the
playing
field”
and
ensure
that
noncompliers
do
not
enjoy
or
gain
a
competitive
advantage
over
competitors
who
have
invested
time
and
money
to
achieve
compliance.
(Resp.
Exhibit
28
P.
1).
No
where
in
this
document
does
it
state
that
economic
benefit
is
based
on
good
faith
efforts,
or
other
punitive
considerations.
Rather,
it
specifically
distinguished
economic
benefit
from
a
penalty
as
provided
on
page
1,
“The
civil
penalty..
.impose
on
a
violator
has
two
components:
the
economic
benefit
being
recovered,
which
ensures
that
the
violator
does
not
profit
from
his
illegal
action,
and
a
dollar
penalty
that
accounts
for
the
degree
of
seriousness
of
the
violation.”
(emphasis
added).
This
is
consistent
with
the
U.S.
EPA
BEN
User’s
Manual
and
the
arguments
presented
above
as
to
why
Mr.
McClure’s
analysis
is
the
most
appropriate
because
it
provides
the
true
cost
of
Toyal’s
noncompliance.
Moreover,
this
same
document
relied
upon
by
Mr.
Styzen
specifically
cites
that
the
BEN
Model
is
used
to
calculate
economic
benefit.
But,
unlike
the
many
examples
cited
in
Mr.
Styzen’s
testimony,
an
economic
benefit
analysis
should
not
be
based
on
one
person’s
unfounded
-
57
-
assertions
or
opinion
that
a company
did
not
make
‘good decisions,’
with
regard
not
only
to
environmental
compliance,
but
to
other
business
practices.
(See
12/10/08,
p.
97:17-98:14).
Mr.
Styzen’
s testimony
is
further
discredited
because
he
contends
(again, without
any
support)
that
Toyal
should
have
come
into
compliance
quickly
and
efficiently;
yet,
Complainant
did
not
present
any
witnesses
or
evidence
which
proves
that
Toyal
could
have
come
into
compliance
any
more
quickly
and
efficiently
than
it
did.
Additionally,
at
the
hearing,
Mr. Styzen
admitted
that
he
does
not
have
the
technical expertise
to
judge
the
complexity
of
installing
pollution
control
capture
and
control
equipment.
(Tr.,
12/10/08
p.
1
01:17-102:12).
Finally,
while
Mr.
Styzen
recites
the
document
“Leveling
the
Playing
Field” at
length,
he
fails
to
acknowledge
that
Toyal
only has
two
other
competitors:
Siberline
and
Eckart,
with
Toyal
being
the
smallest
of
the
three.
Significantly,
however,
both
of
the
larger
facilities
are
located
in
attainment
areas
for
VOMs,
so
they had
none
of
the
restrictions
and
required
no
VOM
controls
based
on
Steve
Anderson’s
review of
their
permit
files.
(Tr.,
12/11/09
p.
88:22
—
89:22).
6.
Complainant’s
Arguments
Regarding
Economic
Benefit
Are
Flawed
and
Reveal
a
Lack
of
Understanding
of
the
Technical
Compliance
Issues
Involved
in
This
Case
Toyal’s
position
regarding
the
proposed
offsets
of
the
solvent
recovery
system
and
the
vacuum
chiller
system
is
completely
different
from
the
argument
made
by
the
respondent
in
the
Panhandle
case.
In
Panhandle,
the
respondent
argued
that
it
did
not
receive
any
economic
benefit
because
had
it
completed
the
required
control
technologies
on
a
timely
basis,
it would
have
saved
a substantial
amount
of
money.
People
v. Panhandle,
PCB
99-191,
*22
(Slip.
Op.
November
15,
2001).
Specifically,
the
Federal
Energy
Regulatory
Commission
(“FERC”)
would
have
allowed
the
Respondent
to
set
its
rates
to
recover
the
expenses
of
the
control
device
plus
a
reasonable
return
on
an
investment
and,
secondly,
the
retrofitting
of
the
controls
at
the
time
was
-58-
more
costly
than
if
it
had
completed
such
changes
at
the
time
of
the
hearing.
Id.
at
23.
The
Board
rejected
this
argument
because,
by
avoiding
those
costs,
the
Respondent
in
Panhandle
was
able
to
use
its
money
for
other
uses.
Id.
Furthermore,
the
Board
noted
that
“the
costs
from
retrofitting
are
self-imposed
and
exist
solely
because
the
violator
did
not
pay
to
comply
on
time.”
Here,
Toyal
spent
$1
million
on
purchasing
the
vacuum
chiller
unit
and
spent
an
additional
amount
on
purchasing
replacement
solvent.
Thus,
Toyal
no
longer
had
this
significant
amount
of
money
to
utilize
for
other
purposes.
Consequently,
Toyal’s
request
to
offset
the
vacuum
chiller
unit
and
the
expenses
of
the
solvent
recovery
system
differ
significantly
from
what
was
presented
to
the
Board
in
Panhandle.
Toyal
is
not
requesting
to
offset
the
costs
of
its
RCO
device
as
it
agrees
with
the
Board
that
the
deterrent
effect
of
civil
penalties
would
be
compromised
if
the
violator
would
get
credit
for
ignoring
its
legal
obligations.
Here,
Toyal
spent
a
significant
amount
of
money
in
trying
to
come
into
compliance.
It
hired
several
competent
professionals
who
unfortunately
did
not
fully
understand
the
complexity
of
Toyal’s
operations
and
how
it
would
be
able
to
satisfy
both
the
capture
and
efficiency
requirements
of
Subpart
TT
rules.
Toyal
reasonably
relied
upon
the
advice
of
its
expert
consultant
to
purchase
the
vacuum
chiller
unit.
Once
Toyal
purchased
the
vacuum
skid
condenser
for
$1
million
in
2000,
it
no
longer
had
the
$1
million
to
spend.
Complainant’s
attempts
to
draw
such
a
parallel
between
Toyal’s
request
and
that
in
Panhandle
mischaracterizes
or
misunderstands
the
facts
in
this
case.
With
respect
to
the
modifications
to
Toyal’s
solvent
recovery
system,
by
using
the
air
stripping
device
Toyal
was
able
to
use
a
system
that
was
better
for
the
environment.
Thus
while
civil
penalties
should
seek
to
deter
violator’s,
there
are
also
factors
in
Section
33(c)
and
42(h)
which
seek
to
mitigate
a
violator’s
good
behavior
as
was
the
case
here.
-
59
-
IV.
CONCLUSION
The
U.S.
EPA
BEN
User’s
Manual
is a
reliable
document
and
it
provides
ample
support
that
Mr.
McClure’s
economic
benefit
analysis
captures
Toyal’s
true
cost
of
noncompliance.
However,
the
Board
has
broad
discretion
in
determining
which
of
the
factors
set
forth
in
Section
33(c)
and
42(h)
to
determine,
what
should
be
an
appropriate
civil
penalty,
if any.
Based
on
all
of
the
information
before
the
Board,
this
is truly
a
case
where
Respondent
was
honestly
trying
to
comply
with
its obligations
under
Subpart
TT.
It
has
expended
a
substantial amount
of
time,
money,
and
other
available
resources
to
demonstrate
compliance
but,
unfortunately,
due
to
certain
unique
circumstances,
its
ability
to
demonstrate
compliance
specifically
with
the
capture
efficiency
portion
of
the
Subpart
TT
rules
for
the
multitude
of
its
small
sources
was
very
challenging.
Further,
although
Toyal
did
not
demonstrate
compliance
until
2003,
it
continuously
operated
a
control
device
since
December
1998
and
has
been
compliant
since
2003.
Based
on all
of
the
above,
Toyal
respectfully
requests
that
a
substantial
penalty
not
be
imposed
in
this
matter
because
such
would
be
inappropriate
and
would
not
aid
in
enforcement
of
the
Act.
Dated:
April
10, 2009
Roy
M.
Harsch,
Esq.
Lawrence
W.
Falbe,
Esq.
Yesenia
Villasenor-Rodriguez,
Esq.
Drinker
Biddle
&
Reath
LLP
191
North
Wacker
Drive
- Suite
3700
Chicago,
Illinois
60606
(312)569-1000
Respectf
y
submitted,
TOY
ERICA,
IN
.
y.
One
ofitsA
eys
-
60 -
BEFORE
THE
ILLINOIS
POLLUTION
CONTROL
BOARD
ECEVED
CLERK’S
OFFICE
PEOPLE
OF
THE
STATE
OF
ILLINOIS
)
APR
102009
Complainant,
)
STATE
OF
ILLINOIS
)
PCB
2000-2
1
1
oIlUtiofl
Control
Board
v.
)
(Enforcement)
)
TOYAL
AMERICA,
INC.
,
formerly
known
)
as
ALCAN-TOYO
AMERICA,
INC.,
a
)
foreign
corporation,
)
)
Respondent.
)
MOTION
TO
FILE
AN
EXPANDED
POST-HEARING
BRIEF
INSTANTER
NOW
COMES
Respondent,
Toyal
America,
Inc.
(hereinafter,
“Toyal”),
by
and
through
its
attorneys,
and
respectfully
requests
that
the
Hearing
Officer
grant
this
motion
requesting
to
exceed
the
page
limitation
set
forth
in
35
Ill.
Adm.
Code
Section
101.302(k)
in
connection
with
its
Closing
Argument
and
Post-Hearing
Brief.
In
support
thereof,
Toyal
states
as
follows:
1.
A
hearing
was
held
in
this
matter
on
December
10th
and
I
Ith,
2008
in
which
Toyal
presented
five
witnesses
to
testify
regarding
the
issues
alleged
in
the
Complaint.
2.
This
matter
covers
an
applicable
time
period
of
over
eight
years.
3.
There
were
many
unique
circumstances
in
this
matter
which
relate
to
the
question
before
the
Board
as
to
what
should
be
an
appropriate
penalty
in
this
matter.
4.
Pursuant
to
Section
33(c)
and
42(h)
of
the
Illinois
Environmental
Protection
Act,
the
Board
considers
the
factors
set
forth
therein,
in
determining
the
penalty
to
be
imposed
in
this
matter.
415
ILCS
5/33(c),42(h)(2007).
5.
Toyal
requests
that
in
order
for
it
to
present
its
Closing
Argument
and
Post-
Hearing
Brief
and
include
all
the
relevant
facts
pertaining
to
the
matter
and
the
mitigation
ol
any
CH0I/
25327081.1
THIS
FILING
IS
SUBMTTED
ON
RECYCLED
PAPER
penalty
to be
imposed
on the
Board,
it be
allowed
to
file
an expanded
brief
that
exceeds
the
50
page
limit
set
forth
in
Section
101.302(k)
of
the
Board
rules.
6.
Toyal’s
expanded
brief
is
a
total
of
60 pages,
and thus,
is
not
excessive.
7.
Toyal
agrees
to
give
Complainant
additional
time
if
it
so requires
in preparing
its
reply
brief.
8.
Toyal
does
not
believe
that
the
parties
will be
prejudiced
by this
request.
WHEREFORE,
for
all
the
foregoing
reasons,
Toyal
respectfully
requests
that the
Hearing
Officer
grant
this
Motion
to File
an Expanded
Brief
Instanter
in
this
matter.
Respectfully
submitted,
Toyal
America,
Inc.
By:________
n
of its
Attorneys
Dated:
April
10,
2009
Roy M.
Harsch,
Esq.
Yesenia
Villasenor-Rodriguez,
Esq.
Drinker
Biddle
&
Reath
LLP
191
North
Wacker
Drive
- Suite
3700
Chicago,
Illinois
60606
(312)
569-1441
(Direct
Dial)
(312)
569-3441
(Facsimile)
CHO1/25327081.1
- 2
-
CERTIFICATE
OF
SERVICE
The
undersigned
certifies
that
a
copy
of
the
foregoing
Respondent’s
Closing
Argument
and
Post-Hearing
Brief
and Motion
to
File
An
Expanded
Post-Hearing
Brief
Instanter
were
filed
by
hand
delivery
with
the
Hearing
Officer
and
served
upon
the
parties
to
whom
said
Notice
is
directed
by
first
class
mail,
postage
prepaid,
by
depositing
in
the
U.S.
Mail
at
191
North
Wacker
Drive.
Chicago,
Illinois
on
Friday,
April
10,
2009.
THIS
FILING
IS
SUBMITTED
ON
RECYCLED
PAPER
CHOI/
25326758.1